DUBLIN: The Central Bank of Ireland (CBI) issued a letter on 12th October 2012 to all regulated companies discussing the findings of the inspections they had conducted to review industry compliance with the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 ("CJA 2010"). The inspections were conducted as part of Ireland's ongoing obligations as a member of the Financial Action Task Force (FATF). Membership of FATF is key to the future success of Ireland's international financial services industry, and the CBI's comments should be considered in light of this.
The letter notes how the inspections have revealed a significantly lower level of compliance than the Central Bank expected, and thus prompted the CBI to issue the letter to all regulated companies. The letter also outlines how the CBI expects companies to act where they identify similar shortcomings in their own anti-money laundering and counter terrorist financing ("AML / CTF") processes.
The key take-aways from the letter are as follows:
It is imperative that the company has adequate documentation in place to clearly demonstrate how the Board of Directors and Senior Management oversee the AML/CTF process. This is particularly important for funds where a delegated model is in place. The AML/CTF process must be continually reviewed by the Board and Senior Management of the company. The Board and Senior Management are responsible for compliance with the CJA 2010. There needs to be documentary evidence and procedures in place to clearly demonstrate compliance with the CJA 2010. Any shortcomings in these procedures should be addressed by companies as a matter of priority. Companies need to keep fully up to date on changes to AML / CTF requirements both at local Irish level and internationally. The main control failures identified from the inspection were Delays in implementing procedures to ensure compliance with CJA 2010 Where the AML / CTF process was delegated an adequate oversight programme was not in place There was no documentary evidence of how and why companies had applied the risk based approach. The CBI will seek documentary evidence of how the Board and Senior Management satisfied itself that an appropriate risk based approach has been implemented. Material gaps in AML / CTF procedures: Again the importance of being able to clearly demonstrate how compliance with the CJA 2010 has been achieved is stressed in the letter. The Board and Senior...