Malta-based bank fined for AML/CFT shortcomings

A Malta-based bank owned by a Dutch billionaire has been fined by Malta’s Financial Intelligence Analysis Unit (FIAU) for failings in its anti-money laundering and counter financing of terrorism (AML/CFT) processes.

Novum Bank, owned by Dutch entrepreneur Marcel Boekhoorn, has been ordered to pay a €89,000 (US$90,000) penalty and told to tighten up its checks on clients.

Regulator’s conclusions

The FIAU found that the bank needed to reduce its money laundering and terrorist financing exposure because the documents it provided the regulator either lacked adequate detail on the risk factors, or the risk factors were not being considered by the bank in its final risk scoring determination.

As an example, the regulator says that in one instance the geographical risk being taken into consideration by the bank was limited to the residence of a customer without consideration to any connection the customer might have with other jurisdictions. Therefore, in the FIAU’s opinion, it was not possible for the bank to identify the customer risk exposure deriving from the jurisdiction level.

No rationale

The regulator examined various transactions ranging between €400,000 and €2 million between a customer and another party and found that while there was a loan agreement between the bank and the customer, there was no rationale given for purpose of the loan.

In another example, the regulator highlighted an outward payment of €16 million that was not supported by documentation explaining the rationale behind the transaction.

The notice issued by the FIAU in respect of the AML/CFT shortcomings found and remedial actions required at Novum Bank as well as the penalty imposed on the bank can be found here.

Categories: Trade Based Financial crimes News

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