Subject: Carne: Central Bank of Ireland Report on Anti-Money Laundering
From: "Carne Global" <[email-masked]>
To: <[email-masked]>
Date: 2 Apr 2015 08:05:02 +0100

Central Bank of Ireland Report on Anti-Money Laundering
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Dublin April 2015

Central Bank of Ireland Report on Anti-Money Laundering/Countering the Financing of Terrorism and Financial Sanctions Compliance in the Irish Banking Sector (the “Report”)

The Central Bank of Ireland recently published a report on Anti-Money Laundering/Countering the Financing of Terrorism (“AML /CFT”) compliance following its AML themed inspections in the Irish banking sector. Whilst the banking sector in Ireland is the focus of the report, the report states “many of the issues raised are relevant to the broader financial services sector in Ireland”. The report further states that the “Central Bank expects all financial and credit institutions to carefully consider the issues raised in the Report, and to use the Report to inform the development of AML/CFT and Financial Sanctions frameworks”. Whilst a fund industry specific report is expected, no clear timeframe has yet been communicated. Outlined below are some of the key themes from the report that will be of interest to the Funds industry.

Whilst a number of the issues highlighted are not strictly legislative requirements, the report gives an insight into what the Central Bank considers to be best practice in the industry. Financial services firms in Ireland would therefore be advised to assess their existing AML programs against the report and address any identified deficiencies as the points raised in the report are likely to form a basis for future Central Bank AML themed inspections.

Risk Assessment

An assessment of Money Laundering/Terrorist Financing risk exposure should be carried out and include all relevant risk categories (such as country/geographic risk, industry risk, customer risk, product risk and channel/distribution risk). The risk assessment should be reviewed and approved periodically.

Management Information

Senior Management must be able to demonstrate receipt and consideration of robust, granular management information including at a minimum the number of customers in respect of which enhanced due diligence was performed, statistics regarding the number of Suspicious Transaction Reports (“STRs”) raised, emerging external developments relevant to AML/CFT, new legislation and regulatory developments. The suite of Management Information should be fit for purpose and continually developed as and when deficiencies are identified.

Reliance on Third Parties to Undertake Due Diligence

Policies and procedures should set out an approach with regard to the identification, assessment, selection and monitoring of third party relationships, including the frequency of testing of activity performed by such third parties. Where routinely relying on checks carried out by a third party, regular assurance testing should be conducted to ensure data can be retrieved quickly and without undue delay and that the quality of the underlying documents obtained is sufficient and that there are no gaps in customer records which cannot be readily explained.

Ongoing Monitoring of Customers

Section 54(3)(c) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, requires that designated persons adopt measures to keep documents and information relating to customers up-to-date. A risk-based approach must be documented and adopted to define refresh cycles to determine the frequency at which Customer Due Diligence information must be renewed and to ensure high risk customers are reviewed on a frequent basis.

AML/CFT and Financial Sanctions Systems

Where Administrators utilise systems in certain areas to facilitate the management and monitoring of Money Laundering/Terrorist Financing risks and Financial Sanctions, the Central Bank expects that firms conduct regular IT assurance testing to include general controls on automated AML/CFT/FS systems, transaction monitoring, screening and filtering systems and data sources used to feed AML/CFT and FS systems.

Link to full report

How Carne can help

Carne has a team of professionals that hold the position of Money Laundering Reporting Officer (MLRO) for a large number of funds serviced by the leading administrators in the Irish market place. Where acting as MLRO, Carne perform a number of key tasks on behalf of the Fund including the following.

Preparing MLRO reports for each board meeting outlining details of any suspicious transactions,stopped accounts, regulatory changes etc.

Assistance with drafting an AML Policy for the Fund and coordinating its annual review.

Completing an annual on-site visit to the Administrator to review their AML policies & procedures and review a sample of investor files. A report is produced for the Board highlighting any issues identified.

Keeping the Board informed of legislative/regulatory updates relating to AML/CFT.

Delivery of annual AML training to the Fund Board.

Providing the liaison between the Company and the Irish Police and the Irish Revenue Commissioners, including and concerning the submission of any suspicious activity report where required.

For further information on the above or the Carne MLRO and AML Compliance Services, please contact Dave Burns: [email-masked] , TEL: +353 1 489 6829.

For further information on Carne, please contact:

Channel Islands

London

Mark Hodgson

Aymeric Lechartier

T: +44 153 451 1786

T: +44 207 936 9139

e: [email-masked]

[email-masked]

Ireland

Luxembourg

Dave Burns

Thomas Nummer

T: +353 1 489 6829

T: +352 2 673 231

e: [email-masked]

[email-masked]

Chicago

New York

Scott Craven Jones

Joe Hardiman

T: +1 312 804 1823

T: +1 732 642 5808

e: [email-masked]

[email-masked]

Asia Pacific

Cayman Islands

Chris Day

John Ackerley

T: +44 207 936 9692

T: +1 345 769 9902

e: [email-masked]

[email-masked]

About Carne

Carne is a leading international specialist in the provision of independent governance services and European management company solutions to the global asset management industry. We advise both hedge fund and traditional fund managers on their governance, oversight and management needs, as well as providing independent Directors to the boards of some of the most respected investment funds globally. Carne has fund directors resident in the key fund jurisdictions, including the Cayman Islands, Channel Islands, Ireland, Luxembourg, Switzerland, the UK and USA.

www.carnegroup.com

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Carne Global Financial Services Limited

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