Anti-money laundering supervision - Derville Rowland, Director of Enforcement

• Protecting the financial system from money laundering and terrorist financing is of utmost importance
• Compliance with anti-money laundering requirements remains a key priority
• Financial institutions must invest in and maintain strong compliance frameworks to help protect the integrity of the financial system

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Speaking at a Banking Payments Federation of Ireland (BPFI) event this morning, Director of Enforcement, Derville Rowland said that Irish banks need to continue to effectively manage money laundering and terrorist financing risks.

Outlining the Central Bank’s risk-based AML supervisory framework, Ms Rowland said that one of the Central Bank’s key expectations is that firms conduct money-laundering and terrorist financing risk assessments specific to their business, and put robust controls in place to mitigate and manage the risks identified. She stressed that firms must have a robust risk based approach and that the Central Bank would not accept a “tick box” approach that does not assess and address underlying money laundering and terrorist financing risks.

Ms Rowland said “Investment in AML controls and focus on a risk-based approach to compliance must continue to be a priority for firms. The banking sector is particularly vulnerable to money laundering and terrorist financing given that it is a main gateway for consumers to the financial system that provides a diverse range of services and products. Weaknesses in AML controls expose the financial system to abuse that not only damages the financial system but is also detrimental for society, as it may facilitate crime and terrorism.”

Ms Rowland also said that while the banking sector has responded positively to the Central Bank’s concerns and is taking steps to remediate shortcomings, the Central Bank would continue to take necessary action in cases of non-compliance. “From a regulatory perspective, our objective is to secure compliance with AML legislation and we will continue to take all necessary steps, including enforcement action, to achieve that objective”.

Notes

The Central Bank’s anti-money laundering (AML) role is to monitor the compliance of financial institutions with their regulatory obligations under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and to take necessary action in circumstances of non-compliance.

Financial institutions are obliged to ensure they have appropriate systems and procedures in place to assess, detect and prevent money laundering and to report suspected transactions. There are approximately 11,000 financial services firms under the Central Bank’s AML supervisory remit.

In the past 8 months, there have been 3 significant enforcement cases concluded against retail banks for AML breaches, with a total of €8.75 million in fines levied on the institutions involved. These cases relate to AML control breaches and do not relate to actual money laundering or terrorist financing.