Wednesday, April 21, 2021

Malta’s regulator fines Credorax Bank over anti-money laundering breaches

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Credorax Bank has been slapped with a €51,000 fine by the Financial Intelligence Analysis Unit (FIAU) for failing to provide it with information in a timely manner.

In a notification on the FIAU’s website, the anti-money laundering unit said Credorax Bank had given delayed replies to 37 requests for information and outright failed to reply to two other requests.

The bank specialises in cross-border e-commerce and processed €4.1 billion worth of payments in 2018.

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Financial institutions regulated by the FIAU are expected to reply to information requests within five days due to the often urgent nature of their investigations.

[su_quote] PEPs are subject to more rigorous anti-money laundering controls [/su_quote]

The FIAU said that Credorax’s delayed replies arrived from two to 20 days late.

This failure to reply to information demands in a timely manner meant the bank had breached anti-money laundering laws, the FIAU said.

In a separate FIAU notification, the unit said that an unnamed notary had been ordered to improve anti-money laundering controls.

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The FIAU found during a compliance visit that the notary did not have a documented business risk assessment and had not properly assessed the risk factors of customers.

It was also found that, in a small part of the files reviewed, the notary had failed to obtain a declaration about whether the client was a politically exposed person (PEP) or not.

PEPs are subject to more rigorous anti-money laundering controls due to the heightened corruption risk.

In a particular case, the FIAU discovered that declarations were only obtained after a transaction had taken place.

The notary was warned that a fine could follow if the necessary anti-money laundering improvements were not made.

According to the FIAU’s last available annual report for 2018, reports from notaries only made up a small fraction of the suspicious activity reports received by the unit.

All entities falling under the unit’s remit are expected to report suspicious transactions by their clients.

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