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AIB fined 2.3m euro for breaches of money laundering and terror group safeguards

State-owned AIB has been slapped with a 2.3 million euro fine after it admitted breaching laws drawn up to thwart terrorists and criminals.

Banking watchdogs said the bailed-out lender was guilty of "significant failures" in its responsibilities to prevent money laundering and the financing of terror organisations.

It was found to have breached the Criminal Justice (Money Laundering & Terrorist Financing) Act on six different counts over a period of more than three years.

All six breaches have been admitted by AIB.

An investigation by the Central Bank, which oversees lenders, found that AIB failed to immediately report suspicious transactions to the Garda and the Revenue Commissioners.

It also failed to investigate customers who had accounts before May 1995, when the first Irish laws on anti‐money laundering and terror financing came into effect.

The Central Bank said it identified more breaches by AIB in a number of other policies and procedures.

It handed down a fine of 2,275,000 euro for the failures.

Derville Rowland, director of enforcement at the Central Bank, said the AIB breaches were "particularly concerning" because adequate resources were not given over to speedily investigate a "substantial backlog" of alerts on potentially suspicious activity at the bank.

Banks are "gateways to the financial system" and need to have "rigorous and robust" defences when it came to suspicious dealings, said Ms Rowland.

"Crucially, those processes must ensure that information on suspicious activity is provided to An Garda Siochana and the Revenue Commissioners without delay to assist with the investigation of money laundering and terrorist financing," she added.

"This case emphasises the fundamental information-sharing role of the financial services industry in the fight against money laundering."

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