FIAU fines Malta-based online bank € 359,339 for AML violation

A Malta-based online bank has filed a restraining order against the Financial Intelligence Analysis Unit for a fine of € 359,339 for breaches of anti-money laundering laws relating to customers involved in the sale of passports, cryptocurrency and with potential links to organized crime.

A press release released by FIAU on Friday indicates that it has issued an administrative sanction against [email protected] plc, based in Sliema, following an inspection which revealed a number of serious shortcomings.

FIAU said some of the bank’s clients had previously been arrested for forgery, others had been linked to organized crime and had been investigated in this regard.

The bank failed to perform adequate enhanced monitoring and controls on these customers, he said.

In a report [email protected] accused FIAU of leaking information about the sanction despite a court-issued restraining order banning the publication, which was filed earlier this week. The bank has hinted that it could sue the agency for violating its right to a fair trial.

FIAU said it identified gaps in the way the bank collects information about its customers. From a review of the bank’s documents, it appeared that it had failed to determine and verify the identity of the beneficial owners (UBO) of its business customers.

In addition, the bank had not collected any information concerning the anticipated level and nature of the operations to be carried out throughout its business relationship with 16 cases – mostly companies – held by the bank before 2018.

In four cases, the bank had not obtained adequate information on the business activity of its customers.

In one file, the client’s primary business activity was listed as “business consulting” and the secondary activity as “IT consulting”. But as a result of the checks carried out by the FIAU, it turned out that the client had in fact provided legal advice “in the field of the acquisition of passports by investment”.

FIAU concluded that the information obtained by the bank was too generic to be able to accurately understand the true nature of the client’s business and, therefore, it was unaware of the risk of crime it posed.

In two other cases, FIAU stated that clients with a transaction limit above € 250,000 had an offshore trust structure in their ownership configuration.

In this case, said FIAU, the structure of the company as well as the annual transactional limit of customers should have prompted the bank to perform enhanced due diligence, but this was not done.

In yet another case, FIAU noted that while the client was operating in the cryptocurrency industry and making significant transactions, the appropriate due diligence had not been performed despite the risks inherent in the client’s activities.

Another transaction between the bank’s clients, in the amount of € 200,000, was not investigated despite the fact that one of the parties was named in several unfavorable media reports.

Other files showed four transactions of between 1 and 2 million euros, which were simply supported by “gentleman’s agreements” which, according to the FIAU, were “vague and lacked sufficient details”.

In its reaction, the bank denied the conclusions of the FIAU, saying that information on the object and the envisaged nature of the business relations was collected and that it was in fact taking enhanced due diligence measures.

In his statement, [email protected] plc said it would sue FIAU for what it called a violation of its rights over the way audits were carried out and penalties imposed.

“The FIAU in this case acted as judge, jury and executioner,” he said, saying that it had not been heard in a fair or impartial manner and that the sanction imposed on it was disproportionate in relation to the shortcomings identified and the size of the company.

[email protected] plc said a local court ordered FIAU not to release any statements related to the sanction, as part of a restraining injunction the bank urgently requested and obtained. Despite this, the FIAU sanction was made public, he said.

“The company feels aggrieved and will challenge the way in which the audit was carried out by the FIAU consultants, the content of the report and the sanctions imposed in all available fora, including before the Maltese constitutional courts and at the level of the EU, “he said. .

He said he ended his relationship with clients reported by FIAU long before they were found guilty or treated for a breach, and denied that [email protected] had clients involved in the sale of passports.

[email protected] also stressed that the sanctions imposed did not take into account the positive remarks that the FIAU had made towards him. The authority noted that the company “was generally proactive in its approach and… had a comprehensive and adequate continuous monitoring system designed to effectively and efficiently review transactions, which system is extremely important to a financial institution in compliance with its AML / CFT obligations. , “It said.


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David A. Albanese

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