Security & Fraud

Allied Irish Banks Fined For Anti-Money Laundering Compliance Failures

Allied Irish Banks was hit with a $2.2 million fine by the Central Bank of Ireland due to compliance failures with anti-money laundering and terrorist financing rules.

According to a report in Bloomberg News, in addition to the fine, the central bank reprimanded Allied Irish Banks (AIB) for six breaches of the law, with AIB admitting to the breaches. AIB said in a statement to Bloomberg that the settlement has to do with issues that happened between July 2010 and July 2014.

The Central Bank told Bloomberg that during that time frame, AIB failed to “report suspicious transactions without delay” to police and tax authorities and did not engage in any due diligence of customers who had accounts that predated the first Irish anti-money laundering laws in 1995.

The Central Bank said it also found AIB’s policies and procedures regarding anti-money laundering and anti-terror financing failed to meet the compliance of the law in several areas, including its trade finance business.

“A comprehensive risk mitigation program was put in place to resolve all of the issues,” AIB said in a statement to Bloomberg. The bank “fully co-operated with the Central Bank at all stages of this investigation, which has now concluded,” it added.

The move on the part of the Central Bank comes weeks before a possible sale of one fourth of the bank on the London Stock Exchange. The Irish government owns 99.9 percent of AIB, due to a bailout during the financial crisis, and is gearing up to sell part of its stake between May and July, with an aim of raising as high as €3 billion.

“Coming just weeks before the planned IPO, this is an embarrassing development for the bank and indeed the government,” said Michael McGrath, finance spokesman for Fianna Fail, the nation’s biggest opposition political party in the report. “The identification of serious breaches by the regulator of vital regulations sends the wrong message to potential investors in the bank at this crucial time.”

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