Anti-money laundering (AML), countering the financing of terrorism (CFT) and financial sanctions compliance are key issues for the Irish financial services industry. In recent years, AML and CFT have been an enforcement priority for the central bank and designated persons have experienced rigorous investigation where breaches have occurred. In this environment, I would like to stress how important it is for the board and senior management to demonstrate compliance with their obligations.

Compliance failure by global financial institutions have become front-page news. Regulators worldwide are reacting more aggressively to breaches and increasing their expectations of institutions. The control failures identified by the central bank include: insufficient board oversight; inability to demonstrate a risk-based approach; material gaps in procedures; lapses in training; failure to conduct appropriate due diligence; and delays in filing suspicious transaction reports. The central bank has signalled that more work is needed if Ireland is to adhere to the highest AML standards.

Regulators expect a holistic approach to AML compliance risk management that includes a firm-wide approach, independence of staff, sound processes for monitoring and testing, board and senior management accountability, comprehensive documentation and an on-going process for risk assessment. Authorities expect firms to have a methodology in place for regularly assessing AML and sanctions risks arising from business activities and customer base.