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Malta starts to crack down on AML-deniers by fining a notary!!


A notary has been fined almost €62,000 for a series of breaches of money laundering rules.

Roderick Caruana could not identify the ultimate beneficial ownership of certain financial structures he was involved with, the Financial Intelligence Analysis Unit said in a notice on its website.

The FIAU on Friday said it had found failures at the notary's office when it came to understanding clients' source of wealth and the source of funds.

In the files it reviewed, they also saw shortcomings in the identification and verification of the identity of the customer and the beneficial owners.

Caruana could also not explain the corporate ownership and control structure of some financial structures. In others, the details were not comprehensive enough to establish who the real ultimate owners are.

  • "As a result, in a number of files where corporate entities were involved, the notary did not determine the beneficial owners behind the corporate customer being serviced," the FIAU said.

Risks unknown:

  1. The FIAU said in its announcement that Caruana did not have an adequate business risk assessment.
  2. He also did not consider "matters which could be indicative of higher money laundering and funding of terrorism risks".
  3. In all the files reviewed by the FIAU, officials found that no customer risk assessment had been conducted.
  4. The FIAU said Caruana had conceded that his analysis needed to be improved and that risk assessments were not carried out in a structured manner.
  5. Ultimately, Caruana had exposed himself to a higher risk of money laundering, the FIAU said.
  6. Even though a service provider knows his clients, the FIAU said, this can never constitute a justification for not carrying out a comprehensive understanding of the customer risk.
  7. The FIAU also found faults in the notary's customer acceptance policy.
  8. Moreover, there were instances where the beneficiaries of a trust, including the settlor and the protector were neither identified nor verified.

Politically exposed risks:

  1. The notary did not always apply the necessary measures to determine whether the parties within the transactions are politically exposed or otherwise.
  2. Consequently, Caruana could not determine whether enhanced due diligence measures needed to be applied.
  3. The FIAU did not say whether the notary had any politically exposed clients.
  4. It was important, the FIAU said, that a notary carrying out relevant activity, is able to understand and review circumstances surrounding customers and transactions that may raise suspicion, and to determine what action should be taken.

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