THE CENTRAL BANK has warned Irish-based financial funds that the size of their industry makes it attractive to criminals.
In a report, it said funds should take measures to more effectively counter the risks of money laundering and terrorist financing.
Following on-site inspections of a number of companies, the bank identified a number of issues that it said need to be addressed.
These included firms’ reliance on third parties to undertake customer due diligence, insufficient evidence of effective ongoing monitoring of investor transactions and a lack of procedures to deal with investors who fail to provide the required due diligence documentation.
The report also raised concerns about firms’ processes in identifying, verifying and documenting sources of wealth.
More work required
Domhnall Cullinan, head of anti-money laundering at the Central Bank, said: “Latest figures show that Irish-domiciled funds have a net asset value of almost €1.8 trillion, making the Irish funds industry a significant part of the financial services sector.
“Any business with such a large variety and amount of customers, high values and volumes of transactions and a cross border nature is attractive for money laundering/terrorist financing.”
He added that the bank “acknowledges that many firms had responded positively to previous Central Bank communications”, but that more work is required to “effectively manage” the risks of money laundering and terrorism financing.
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