RegSol Blog


Dear CEO Letter from CBI regarding low level of compliance with Anti-Money Laundering and Terrorist Financing obligations addressed to Schedule 2 firms

January 2021

On the 16th Dec 2020, the CBI published the results of their supervisory engagements with Schedule 2 firms regarding their obligations under the Criminal Justice Act 2010 as amended.

The results show an overall lack of compliance across all areas of the AML/CFT control framework. Poor understanding of the requirements from Board and senior management levels, including at those firms who outsourced their AML/CFT and FS activities to third parties were also noted.

A number of failings across Schedule 2 Firms, were identified:
  • Board Oversight and Governance - failure to demonstrate Boards had taken responsibility for the implementation and ongoing oversight of AML/CFT and FS in a number of firms.
  • Money Laundering/Terrorist Financing Risk Assessment - lack of ongoing and comprehensive assessment and documentation of ML/TF risks that are specific to each firm’s consumers and business activities.
  • Anti-Money Laundering/Counter Financing of Terrorism Policies and Procedures - failure to put in place and implement firm-specific AML/CFT and FS policies and procedures, and failure to review and update these on an ongoing basis.

Director of Enforcement & Anti-Money Laundering, Seána Cunningham said: “The Central Bank expects all firms to be alert to the risks that money laundering and criminal financial activities may pose to their customers and business, and the wider integrity of the Irish financial system.

This requires CEOs and Boards to have in-depth knowledge and understanding of their Anti-Money Laundering and Counter Financing of Terrorism obligations. It is also essential to have the necessary control framework in place to ensure protection of their business and customers.”

Schedule 2 firms were required to register with the Central Bank of Ireland under s.106 of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 with effect from November 2018 in line with the transposition of the 4th EU AML Directive. It is noted that the current process of transposing the 5th EU AML Directive includes a similar requirement for Virtual Asset Service providers (virtual currency wallet holders, etc.) to register with the CBI so these firms should also take note.

Central Bank publishes “Dear CEO” letter to Schedule 2 firms on low level of compliance with Anti-Money Laundering and Counter Financing of Terrorism obligations




By: Judy de Castro