The work of the AML unit is not complete. Firms should expect more inspections as the annual program of risk-based thematic inspections is set to continue. The focus of these inspections would be in the following areas:

• Specific provisions of the 2010 Act

• Compliance with Guidelines

• Specific types of financial activity

Regulatory Tools

There will be deep-dive inspections on firms on a particular issue or a range of issues that it may have. The Central Bank of Ireland has indicated that it will use the full suite of regulatory tools that it has at its disposal, including:

• Warnings

• Risk Mitigation Programme

• Directions

• Cease and desist

• Not taking on new business or business in a particular location

• Enforcement

The Central Bank will continue in publishing more ‘Dear CEO’ letters as a continuation of their communication policy.

Typical Inspection Process

An inspection from the Central Bank of Ireland is a stressful time for any firm. However, it is better to be prepared and know the process beforehand. The typical focus during an AML inspection would be:

• Positioning of AML/CFT in the organisation

• Resources deployed

• Identification and mitigation of risks

• Alignment of business processes

• Decisive actions taken promptly when required

• Monitoring and management of compliance with policies and procedures

• Ability of firm to demonstrate compliance.

The firm will be selected through a risk-based approach. This depends on a number of factors including type of firm, activities it carries out, complaints, PRISM risk rating etc. A notification letter will be sent to the firm outlining the following:

• Scope of the inspection

• Date of the inspection

• Who will be attending

• Documents to forward immediately to the Central bank

• Documents to have available on the day of the inspection.

On-Site Inspection

The onsite visit will comprise of the following:

• Opening meeting(s) with senior management and/or MLRO

• Interview with MLRO/Head of Compliance with responsibility for Anti-Money Laundering

• Walk-through of systems – ‘a day in the life of your processes0

• Sampling of CDD files

Following the onsite visit, the Inspection team will prepare a report for internal use and issue a post-inspection letter to the firm. If there are any issues a risk mitigation plan will be opened and pursued until the matters are closed out. If there are any issues the firm will be made aware of:

• The facts

• Supporting information

• Relevant provisions of 2010 Act that have been contravened

• Recommended actions.

Recommended Actions

The recommended actions could be numerous and wide ranging. Some of the more common ones are:

• Amend policies and procedures with Board assurance

• Undertake broader sampling exercise of CDD files

• Conduct remediation exercise within a set time limit

• Cease accepting new business until issues have been resolved.