Ireland Publishes Anti-Money Laundering Guidelines for Financial Sector
The Central Bank of Ireland has released its eagerly anticipated “Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector”, outlining its expectations on anti-money laundering and counter-terrorist financing compliance. The guidelines are crucial reading for financial institutions, including:
- Banks
- Insurers
- Investment firms
- Funds
- Fund managers
Background
Ireland’s existing anti-money laundering framework was introduced by the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which was amended in November 2018 to transpose the EU’s Fourth Money Laundering Directive. The Central Bank issued a draft version of the guidelines in December 2018, followed by a feedback statement on Tuesday.
Key Features
The guidelines set out the Central Bank’s expectations regarding anti-money laundering and counter-terrorist financing obligations imposed on financial institutions following the transposition of the directive. They also incorporate expectations from previous Central Bank reports and European Supervisory Authority guidelines.
The guidelines are divided into 10 main sections, including:
- Risk management
- Customer due diligence
- Governance
- Suspicious transaction reporting
- Training
- Record keeping
Risk Management
One significant change introduced by the directive is the requirement for entities in scope to carry out a business risk assessment, which involves identifying money-laundering and terrorist financing risks relevant to their business.
The guidelines provide detailed guidance on factors to consider when identifying these risks, as well as assessing and mitigating them. They also set out the Central Bank’s expectations regarding customer due diligence, including the use of “RegTech” solutions.
Governance
Governance is critical in effective anti-money laundering compliance, with the guidelines emphasizing the importance of a positive and transparent relationship between financial institutions and the Central Bank.
Suspicious Transaction Reporting
Suspicious transaction reporting is a key component of anti-money laundering efforts, with the guidelines providing significant detail on identifying suspicious transactions and making reports. The guidelines also deal with the tipping-off offence.
Training and Record Keeping
Financial institutions are reminded to provide staff with appropriate training on compliance with anti-money laundering obligations, including outsourced AML/CFT functions. While the draft guidelines stated that firms must assess staff at the end of AML/CFT sessions, the final guidelines offer more flexibility in this regard.
Conclusion
Firms should review their policies and procedures to ensure compliance with the new guidelines. Regulators are currently stepping up efforts to prevent money laundering and terrorist financing, making it essential for financial institutions to understand and implement these guidelines.