Allied Irish Bank is now promising to review its procedures for implementing the money-laundering provisions of the Criminal Justice Act after a judge at Cork Circuit Criminal Court this week criticised its branch at Cahir, Co Tipperary, for failing to fulfil its obligations under the legislation.
The criticisms raised by Judge Patrick Moran - in a case in which a Swiss woman, Bernadette Jahle, was jailed for five years - could scarcely have been more serious. Judge Moran accused the bank of being " . . . only concerned with the debt that had accumulated on the account and not with the (money-laundering) legislation ".
The facts of the case speak for themselves: when over £209,000 arrived in Jahle's Cahir account in August 1996 the bank, instead of alerting the authorities, moved to clear the accumulated £169,000 debt on the account. The contrast with what happened when £93,000 was deposited with the TSB in Midleton is instructive. On that occasion, the bank alerted its money-laundering section and a chain of events which would eventually lead to this week's case began.
The most disturbing aspect of the Cahir case is that it forms part of a trend in which some banks and building societies adopt what might be politely termed a minimalist approach to their duties under the Criminal Justice Act - even when there are bona fide suspicions of money-laundering. Recently, the head of the Garda Bureau of Fraud Investigation, Chief Supt Frank Glacken took the unusual step of accusing some banks and building societies of failing to bring suspicious transactions to the attention of the bureau. Earlier this year, he complained that a major drugs dealer could spend £1 million on a home in one of Dublin's leafy suburbs with no questions asked.
The fact that Chief Supt Glacken was moved to raise such criticisms is, in itself, disturbing. Every citizen, be he a banker or whatever, has a responsibility to report suspicions about money-laundering to the relevant authorities. Indeed, Chief Supt Glacken's recommendation that solicitors, auctioneers and accountants should, like the banks, be obliged to report any suspicious transactions to the Garda has much to commend it. It may well be, as some in banking circles allege, that the wording of the legislation governing money-laundering is imprecise and open to differing interpretations. But if there are difficulties or ambiguities, the financial institutions should not be slow in alerting policymakers and the Garda.
In the Cahir case, AIB has now, belatedly, admitted that a mistake was made. But the bank would do well to divest itself of the defensiveness that marked its initial response to the judge's comments. In the interests of the wider society they serve, AIB and the other financial institutions must also be much more proactive and vigilant in their implementation of the Criminal Justice Act. They must adhere to both the spirit and the letter of the law.