AIB has been fined €2.275m for antimoney laundering and terrorist financing compliance failures by the Central Bank after admitting six breaches of the Criminal Justice Act.
It is the second highest fine imposed by the Central Bank for money laundering failures after Ulster Bank was fined €3.325m in October 2016. It is also in the top 10 fines ever imposed by the Central Bank.
The Central Bank said it identified six breaches of the 2010 act “as a result of significant failures in AIB’s antimoney laundering and counter-terrorist financing controls, policies, and procedures”. It said the breaches occurred after the enactment of the act in July 2010 and persisted on average for over three years.
Breaches identified include AIB’s failure to report suspicious transactions without delay to gardaí and the Revenue Commissioners. The fine comes as the Government mulls whether to approve an early summer sale of AIB shares, which may raise over €3bn.
The watchdog said AIB had failed to conduct customer due diligence on existing customers who had accounts prior to May 1995 when the first Irish laws on antimoney laundering and countering the financing of terrorism became effective.
During the investigation, it was found that AIB failed to apply adequate resources to ensure suspicious activity was promptly investigated.
The Central Bank said AIB’s centralised anti-money laundering unit, which is responsible for investigating and reporting suspicious transactions, took more than 18 months to fully address the backlog, which at one point stood at more than 4,200 alerts outstanding for 30-plus days.
AIB failed to ensure relevant senior management received proper information on the volume and duration of alerts awaiting investigation. It also failed to report 211 suspicious transactions identified from the backlog to gardaí and the Revenue Commissioners as soon as practicable.
The director of enforcement at the Central Bank, Derville Rowland, said: “Firms must have rigorous and robust processes for identification, assessment and reporting of suspicious customer activity. Crucially, those processes must ensure that information on suspicious activity is provided to An Garda Síochána and the Revenue Commissioners without delay to assist with the investigation of money laundering and terrorist financing.
“This case emphasises the fundamental information sharing role of the financial services industry in the fight against money laundering.”
Ms Rowland said it was the second enforcement action taken in the last six months by the Central Bank against a bank for “unacceptable weaknesses” in antimoney laundering procedures.
A spokesperson for AIB said it had co-operated fully with the investigation.
“AIB notes the settlement agreement with the Central Bank of Ireland regarding issues that occurred between July 2010 and July 2014, relating to anti-money laundering and counter-terrorist financing controls, policies and procedures. A comprehensive risk mitigation programme was put in place to resolve all of the issues.
“AIB has fully co-operated with the Central Bank at all stages of this investigation, which has now concluded.”
The largest fine was on Irish Nationwide, which was fined €5m for breaches of financial services law and regulation in 2015.
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