Britain's financial service regulator yesterday fined a Northern Irish bank £1.25 million sterling (€1.77 million) for breaches of its money laundering rules.
The Financial Services Authority (FSA) said that it fined Northern Bank, a sister company of National Irish Bank (NIB), for failing to apply proper anti-money laundering controls to new accounts.
The bank yesterday said that it would not contest the FSA finding.
The FSA's statement said its investigation found that Northern Bank "failed to get sufficient information to prove customer identity in an unacceptable number of new business accounts opened across its retail branch network between December, 2001, and September, 2002".
It added that, in some cases, Northern Bank had only verified clients' names, but not their addresses, or that the documents its staff obtained were not capable of verifying customers' identities.
The FSA said it was concerned at the bank's failure to properly identify business clients as the financial services industry had identified corporate entities as the most likely money laundering vehicles.
National Australia Bank owns both Northern Bank and NIB.
A spokesman said yesterday that NIB had kept the Irish Financial Services Regulatory Authority (IFSRA) informed of all developments, but stressed that the Republic's regulator was not investigating any suspected breaches of money laundering legislation at the institution. "There are no issues of this nature with NIB," he said.
"NIB would have very high levels of compliance. It has been turned upside down as a result of the recent investigations and other issues dating back to 1998. We kept the regulator informed as a matter of courtesy."
The IFSRA said it did not comment on individual cases.
A spokeswoman said it regularly inspected all the Republic's financial institutions to ensure their compliance with money laundering legislation.
Northern Bank chief executive Mr Don Price said it accepted the FSA's ruling.
"We have since been working co-operatively with the regulator to ensure that our record keeping is now fully compliant," Mr Price said.
