FIAU issues €500K in fines for anti-money laundering obligations failure

FIAU sign

The financial watchdog has issued five administrative penalties on a number of subject persons for their failure to meet their anti-money laundering and combating the financing of terrorism obligations.

In its report for the period between January and July published on Monday, the Financial Intelligence Analysis Unit (FIAU) said that these failures were identified during onsite examinations and amounted to a total of €568,373 in administrative penalties.

The FIAU noted that the outbreak of coronavirus pandemic in Malta forced the watchdog to adapt to a new reality as its employees moved to remote working. During the period between 1 January to 15 July, the FIAU along with the Malta Financial Services Authority and the Malta Gaming Authority carried just over 140 examinations, most of which were offsite.

The entities under scrutiny included credit institutions, financial institutions, gaming companies, firms providing investment services, as well as trustees and company services providers.

Due to the coronavirus, the FIAU extended the deadline for the submission of the Risk Evaluation Questionnaire which was introduced in 2019. The questionnaires serve to enhance the information available to the watchdog during the carrying of its assessment and in turn assist it in carrying out risk-based supervision. It includes various questions covering the inherent risks and control frameworks in place, and are sector-focused thus also enabling a deeper understanding of specific sector risks. The FIAU also invested in software which enables better visualization and analysis of the data.

The compliance monitoring committee which is entrusted with the unit’s enforcement work, carried out 37 meetings and continued with its enforcement, according to the report.

A total of nine remediation directives were issued on subject persons operating in various
sectors of the economy, the report notes.

Further, the committee also took actions on subject persons that either failed to submit or have handed their 2019 Risk Evaluation Questionnaire late. 207 potential breaches were discussed, with the FIAU issuing 115 administrative penalties amounting to €529,950 against those who failed to submit their questionnaire.

The financial watchdog also issued a total of 30 administrative penalties on subject persons for replying late to requests for information made by the FIAU’s Intelligence Analysis function. These amounted to EUR 304,500.