The Financial Services Authority (FSA) has fined the Bank of Ireland (BoI) £375,000 for failing to have in place systems to detect a series of high-risk, cash transactions worth approximately £2 million, in breach of anti-money laundering regulations.
The transactions, which entailed the misuse of bank drafts at a particular BoI branch over a period of four years, are currently being investigated by police.
Philip Robinson, financial crime sector leader at the FSA, says: "Adequate systems and controls are fundamental to the UK anti-money laundering regime's effectiveness and firms must identify the money laundering risks in their business and take appropriate action to reduce these."
He says the transactions were high-risk in terms of providing scope for money laundering and were in breach of BoI's policies and procedures. They were identified by the bank during a branch audit in March 2003, when drafts issued to a customer worth £1.8 million were found to be outstanding.
"BoI did not establish adequate systems and controls to monitor the issuing of bank drafts and did not check that its staff understood fully their anti-money laundering responsibilities in relation to the recognition and reporting of suspicious transactions," says Robinson.
The bank says it has since taken steps to introduce a revised training programme that involves checking that staff understand their responsibility to recognise and report suspicious transactions.