Denmark’s Danske Bank has been fined €1.82 million by the Central Bank of Ireland for failing to ensure that its Dublin-based branch properly monitored transactions for potential money laundering or terrorist financing for almost a decade.
The Central Bank found in its investigation that Danske did not update a historic automated transaction monitoring system, which rolled out in the Irish branch in 2006, when the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 came into force in the State.
“This led to the erroneous exclusion of certain categories of customers from transaction monitoring, including some customers rated by Danske as high and medium risk,” the regulator said, adding that the shortcomings caused three breaches of the law.
“In May 2015, Danske became aware, as a result of an internal audit report, of the inadequacies in its transaction monitoring system and the nature of the risks they posed, yet it failed to notify the Irish branch of these issues and to take adequate action for almost four years,” it said.
It was only in October 2018, when the Irish branch identified the issue, that steps were taken to rectify it. The Central Bank was not informed of the matter until February 2019, a month before the matter was finally resolved.
It is estimated that between August 2015 and March 2019, 348,321 transactions, equating to 2.43 per cent of all transactions, processed through the Irish branch were not monitored for money laundering and terrorist financing risk.
The Copenhagen-based group entered the Republic in 2005 with the purchase of National Irish Bank. While it pulled out of Irish retail banking in 2013, it remained in the corporate and institutional market.