Central Bank warns firms to clean up their anti-money laundering act

Review of Schedule 2 firms found overall lack of compliance with obligations

The Central Bank found that many of the firms in question could not show  proper oversight of anti-money laundering functions in cases where they were outsourced to third parties. Photograph: iStock

The Central Bank found that many of the firms in question could not show proper oversight of anti-money laundering functions in cases where they were outsourced to third parties. Photograph: iStock

 

The Central Bank has written to firms carrying out finance functions but not authorised by the organisation, from aircraft leasing companies to providers of safety deposit boxes, warning it will take enforcement action over shortcomings in the global fight against money laundering and terrorism financing.

Since late 2018, firms offering various financial services but otherwise not licensed by the Central Bank are required to register for anti-money laundering purposes with the authority. These companies are known as Schedule 2 firms by the bank.

A review by the Central Bank this year found an overall lack of compliance by such firms with their obligations under laws to fight money laundering and terrorism financing.

The bank found that many firms could not show that such issues were a regular agenda item for board meetings, or the proper oversight of anti-money laundering functions in cases where they were outsourced to third parties.

Sanctions

The Central Bank’s head of anti-money laundering division, Tommy Hannafin, highlighted in the letter that, as a breach of anti-money laundering laws “may result in significant criminal or administrative sanctions, it is imperative that the implications of non-compliance are understood by the board and senior management of Schedule 2 firms and that all necessary steps to ensure ongoing compliance have been taken”.

“The Central Bank is prepared to use the full range of its regulatory tools where firms do not comply with their [legal] obligations. This includes, where necessary, the pursuit of enforcement action against firms,” he said.