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FIAU charged Silema-based ECCM Bank €310,000 over failings in money laundering controls, revealing a public notice of insufficient business and customer risk assessment measures
A Silema-based bank was charged €310,000 by FIAU (Financial Intelligence Analysis Unit), Malta’s AML unit, for weak money laundering controls. The authority revealed in a public notice that the ECCM bank did not have sufficient customer and business risk assessment measures.
Although FIAU conceded that the bank’s business model uncovers fewer risks than other banks, ECCM must still perform a complete business risk assessment on time.
The FIAU reported that most of the bank’s clients were classified internally as moderate to low risk.
These risk ratings did not show the actual money-laundering risks posed when considering some of the complex corporate networks by some of its customers.
The ECCM assigned risk ratings for customers were not up to the mark as it did not consider all risk factors, said the FIAU. Therefore, it resulted in a “distorted” understanding of concerns involved in the incorrect application of internal controls.
The bank also needed to carry out periodic reviews of money laundering risks from its existing customers, as per reports from FIAU. Furthermore, Malta’s AML Unit found that the bank was not gathering adequate information on the business activities of its customers.
ECCM also relied on generic descriptions regarding the origins of particular customer funds. In one instance, the client’s funds source was simply to put down “worldwide business activities” without clear indications of what business activities consisted of.
The Bank’s transactions monitoring was also found to have particular shortcomings, with FIAU focusing on specific transactions worth €100 million that did not receive thorough scrutiny from the bank.
On the compliance review, ECCM provided a copy of minutes to the FIAU indicating that €100 million was used for investments.
The authority said those minutes did not indicate the source of the €100 million; instead, it simply outlined the use. FIAU also expressed concern that the bank was satisfied with knowing the funds’ channel rather than getting complete data and documents to verify the source of funds.
Apart from fines, the report demanded that ECCM take remedial actions to back their AML controls.
A total of 119 entities are regulated by the FIAU, covering gambling firms to independent professional lawyers who promptly failed to provide the unit with information.
The Financial Intelligence Analysis Unit emphasised that requests sent from the intelligence section are “crucial and indispensable” to performing its functions.