The settlement – the second highest on record in this category – follows AIB last month being hit with a near €2.3m fine for its anti-money laundering failures; something which chairman Richard Pym called “a stain” on the bank’s reputation.
Since 2006 the Central Bank has doled out fines totalling nearly €11m to nine institutions failing money laundering regulations as set out in the Criminal Justice Act. The largest, to date, remains Ulster Bank’s €3.32m fine last October.
Bank of Ireland was fined and reprimanded for 12 breaches of the Criminal Justice Act, with them occurring over three years from 2010. The Central Bank said it identified “significant” failures in BoI’s anti-money laundering and counter terrorist financing controls, policies and procedures.
Six suspicious transactions weren’t reported to An Garda Síochána and the Revenue Commissioners quick enough, according to the Central Bank, while the bank also failed to properly assess specific risks to its business and fell down on necessary compliance levels relating to customer due diligence measures.
The reporting of suspicious transactions to the authorities without delay is classed as a fundamental component of anti-money laundering legislation compliance, according to the Central Bank.
The Central Bank’s director of enforcement Derville Rowland said the high volume and range of breaches showed there to be “significant weaknesses” in the strength of Bank of Ireland’s implementation of anti-money laundering and counter terrorist financing legislation.
“Such behaviour is unacceptable and falls far short of the standard expected of one of Ireland’s largest retail banks,” she said.
“Financial services firms have a duty to protect not only themselves but also the wider financial system from money laundering and terrorist financing,” Ms Rowland added. She called it “concerning” Bank of Ireland failed to identify deficiencies in its procedures relating to enhanced customer due diligence for its non-EU correspondent banking relationships.
“Correspondent banks are specifically recognised under the anti-money laundering regime as presenting a high money laundering risk,” she said.
In a brief statement, Bank of Ireland said it has co-operated fully with the Central Bank, takes its regulatory obligations “seriously” and “regrets these issues arose”.