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November 28 2017 2:30 AM
The Central Bank of Ireland has hit the life assurance arm of Italy's largest bank, Intesa Sanpaolo, with a €1m fine after discovering "significant failures" in its anti-money laundering and counter-terrorist financing controls.
Intesa Sanpaolo Life, which does not sell life assurance products in Ireland, has admitted the breaches.
The penalty is the latest in a line of similar cases this year as the regulator continues to crack down on institutions with weak anti-money laundering regimes amid a global push to strengthen compliance in this area.
Last April, AIB was hit with a €2.3m penalty for six breaches of anti-money laundering and counter terrorist financing controls.
The episode triggered red faces among the lender's management as they prepared to front potential institutional investors ahead of a €3.4bn initial public offering.
Bank of Ireland was next in line to receive a fine from the regulator.
In May, the lender was fined €3.15m for "the high volume and range of breaches uncovered" in an investigation by the Central Bank.
The banks' shortcomings in policing their operations revived concerns about a sector that has relied on an initial €64bn bail-out to claw its way back to health.
Two credit unions have also been swept up in the regulatory crackdown.
Last March, Drimnagh Credit Union was penalised to the tune of €125,000 for failures to properly implement anti-money laundering procedures, which followed a €98,000 fine for Bray Credit Union in December after it too fell foul of the Central Bank's rules.
The push from the Central Bank comes as the EU increases pressure on all members of the bloc to intensify efforts to prevent money laundering and terrorism financing.
In July, authorities in Brussels wrote to 17 EU countries, pressing swifter enforcement of rules aimed at thwarting illegal financing.
Yesterday Brenda O'Neill, head of enforcement investigations at the Central Bank, said the Intesa case "highlights that firms authorised in Ireland and 'passporting' into other European Union financial markets remain subject to Irish AML/CFT legislation".
In a statement the Central Bank said it identified four breaches of Criminal Justice (Money Laundering & Terrorist Financing) Act, 2010 at Intesa Sanpaolo Life, which at the time of the failings sold life assurance products into the Italian and Slovakian markets.
The breaches occurred in July 2010 and continued on for a further three years and 11 months, the regulator said.