Danske Bank has been fined €1.82 million (US$1.79 million) and reprimanded by the Central Bank of Ireland (CBI) for three transaction monitoring failures in its anti-money laundering and counter financing of terrorism (AML/CFT) systems.
The three breaches of Ireland’s criminal justice act (CJA) all stem from the first breach, the failure of the Danish bank to ensure that its automated systems monitored the transactions of certain categories of customers of its Irish branch between 2010 and 2019. All three breaches have been admitted by Danske.
Transaction Monitoring
According to the CBI’s enforcement action, the root cause of this failure was historic data filters that were applied within Danske’s automated transaction monitoring system.
The bank failed to consider the appropriateness of these historic data filters within the system or make any adjustments to the system to take account of the specific requirements of the CJA when it came into force in Ireland in 2010.
Danske also failed to ensure that its systems monitored the transactions of certain categories of customer for money laundering and terrorist financing risk.
Further breaches
Danske’s Irish branch did not take into consideration transaction monitoring data, which is necessary to identify and assess money laundering and terrorist financing risks specific to those customers and identify where any consequential additional measures might be required.
The AML/CFT policies, procedures and controls put in place by Danske meanwhile did not operate to identify the erroneous exclusion of certain categories of customers from automated transaction monitoring.
First penalty
The CJA estimates that during 2015-19, a total 348,321 transactions – or one in forty of all transactions processed through the Irish branch – were not monitored for money laundering and terrorist financing risk.
The €1.82 million fine on Danske is the first penalty CBI has imposed on a financial institution which is incorporated and supervised outside of Ireland, but which operates in the country as a branch.
The CBI’s enforcement action against Danske Bank can be found here.
Categories: Trade Based Financial crimes News
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