Financial firms based in Ireland need to do more to keep on top of potential money laundering and terrorist financing, according to the Central Bank.
In a report on the area, the authority said that Irish domiciled funds had a net asset value of almost €1.8 trillion - with the industry’s scale and cross-border nature making it attractive to criminals.
Following on-site inspections at a number of firms, the Central Bank said that while satisfactory processes and controls were in place in some areas, a number of issues were encountered which need to be improved upon.
These included insufficient evidence that transactions were monitored on an on-going basis, weaknesses in the process for reporting suspicious activity, and a lack of procedures for ending relationships with investors who failed to provide requested documentation or information.
Some were also overly reliant on third parties in some areas, while the bank found insufficient evidence that many had implemented the requirements laid out in the Criminal Justice Act 2010, which dealt with money laundering and terrorism financing.
The Central Bank report recommended that fund service providers worked more closely with each other to ensure appropriate measures were put in place to reduce the risk of their facilities being used for criminal purposes.
It also said that it expected all financial and credit institutions would carefully consider the issues raised in its report, and use it to better inform their approach to the area.
