FIAU imposed a penalty of EUR 2.6 million on the Bank of Valletta for failing to report Beneficial Ownership information.
According to BOV, there were 2,443 business clients in the Central Bank Account Register reporting to the FIAU. 492 of these clients were removed as they were inactive, while the other 556 required a review of customer due diligence information and documentation. It noted that there are no signs that affected accounts were indulged in terrorist financing or money laundering.
“The fine imposed by the FIAU on the Bank will not have any significant impact on the Bank’s financial or capital position and Bank of Valletta remains well-capitalized and profitable,” the bank reassured.
FIAU stated that the bank had only gathered basic personally Identifiable information of UBOs of clients through bulk exercise carried out by Beneficial Ownership Register maintained by the Malta Business Registry (MBR) in June 2021.
“The Committee expressed its concerns at the Bank’s failures and commented that the obligation to understand who the individual(s) behind a corporate customer is, is considered as one of the most basic and essential steps of customer due diligence. Without such information, the Bank was essentially unaware whom it was ultimately servicing,” the measure notice reads.
However, the bank took instant action on the allegations and assured to cooperate with the FIAU and invest in programs to make financial operations transparent to curb money laundering.
Rick Hunkin, Chief Executive Officer of Bank of Valletta said, “Bank of Valletta takes its responsibility towards regulators extremely seriously; there can be no excuse for a violation of CBAR reporting and this fine is a harsh but important reminder of the need for our systems to be flawless”.
“The Bank is committed to implementing best in class practice systems and being fully compliant with FIAU and international standards,” he added.
After this, PN MP Mario De Marco said it’s shameful for the country, that its primary bank, was found guilty and penalized EUR 2.6 million for failing to comply with the regulatory obligation.
“This does not augur well for the efforts of the country, to get out of the FATF grey list. This could have occurred only for two reasons, carelessness or worse, to cover up information related to individuals or companies that were using the Bank of Valletta to deposit their funds and borrow money. Either way, this is very worrisome,” De Marco stated. He called on politicians and BOV to assume responsibility for these shortcomings, so that reputation of the country could be saved. However, stakeholders and customers invested in the bank will be adversely affected.
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