The Central Bank has fined Western Union €1.75m after the payment services giant failed to comply with money laundering and terrorist financing laws.
The procedures are meant to stop the proceeds of crime being transmitted around the world and to ensure that customers can be identified.
Companies must ensure they retain proper records and maintain systems to identify suspicious transactions. But the Central Bank said Western Union failed to show that it had “robust” controls to meet the conditions for anti-money laundering and to prevent the financing of terrorism.
“The level of the €1.75m fine imposed reflects a significant increase to penalties imposed previously by the Central Bank for failures in respect of a firm’s anti-money laundering/countering the financing of terrorism procedures,” Derville Rowland, director of enforcement at the Central Bank, said.
“The Central Bank action must be viewed in light of the inherent risks in the sector in which this firm operates and by reference to the scale and geographic size of the firm’s business and its reliance on third party agents and outsourced service providers.”
The bank found Western Union failed to apply proper procedures when it outsourced certain compliance obligations to a unit it owned in Lithuania.
The breaches of due diligence over its record-keeping involved its failure to ensure its network of retail agents took and retained copies of identification documents. These failures potentially comprised any investigation by gardaí and the Revenue Commissioners, it said.
On training, the Central Bank said that Western Union typically only ensured that one person was trained in compliance regulations and failed to provide regular training courses to agents.
“The firm is a global market leader in the provision of payment services. I am therefore concerned that this firm failed to have in place sufficiently robust systems and procedures to train agents, to monitor and identify suspicious activity in respect of smaller transactions, and to maintain appropriate records,” Ms Rowland said.
“Where firms choose to engage in outsourcing or place reliance on third party agents, it is our clear expectation and requirement that they put in place appropriate outsourcing controls.
“I would further remind firms that the obligations imposed on firms and management apply equally in situations where activity is outsourced on an intra-group basis as it does to situations where activity is outsourced externally.”
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