Central Bank fines Ulster Bank over €3.3m

Regulator calls the breaches "especially concerning"

The Central Bank has reprimanded Ulster Bank Ireland and announced fines of over €3.3 million.

Ulster Bank broke rules aimed at tackling money-laundering and terrorist financing failures. 

The breaches, which occurred over a six year period, have been admitted by Ulster Bank Ireland.

Under the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 financial institutions must have adequate policies and procedures in place to prevent and detect the commission of money laundering and terrorist financing.

The bank outsources 25 anti money laundering and terrorist financing activities to four entities within its Royal Bank of Scotland parent group. However, regulators said the bank failed to put in place an outsourcing policy for an 11-month period from July 2010 to June 2011, and also failed to have a service level agreement in place for 19 out of the 25 outsourced activities, a situation that continued for an average of two years.

Ulster Bank also failed to demonstrate it provided training to non-executive directors within the bank on anti-money laundering regulations until 2013.

“Weaknesses in anti-money laundering controls expose the Irish and global financial system to abuse and threaten to undermine its stability", Director of Enforcement, Derville Rowland said. "In today’s global environment, the threat of money laundering and terrorist financing requires credit and financial institutions operating in Ireland to rise to the challenge of managing and mitigating these risks,” said Director of Enforcement, Derville Rowland."

This is the second multi-million euro fine imposed on the bank within the last two years. In 2014, the Central Bank issued Ulster Bank with a record €3.5 million fine for IT failures in 2012.

The Central Bank confirmed that their investigation into Ulster Bank is closed.