News

Malta's FIU fines firm €373,670  for serious AML/CFT breaches

15/01/2021

Malta's Financial Intelligence Analysis Unit (FIAU) published on 3 December an administrative measure notice against Insignia Cards Limited, an e-money institution providing payment cards to European customers, imposing a fine of €373,670 on the company for breaches of the anti-money laundering and counter-terrorism financing (AML/CFT) regulations.

According to the notice, which was imposed on 24 November, an on-site inspection conducted in 2019 revealed numerous red flags pertaining to the company's risk assessment, including:

  1. Failures to implement the necessary due diligence on its potential customers and deficiencies in implementing detailed controls on high-risk customers, such as minimising the risk posed by customers from non-reputable jurisdictions.

Most notably, Insignia

  1. Was found to have failed to request sufficient source of wealth documentation from a politically exposed person (PEP) rated as high-risk due to his links with the Russian mafia.
  2. On another occasion, the company was found to have on-boarded a high-risk client, who was initially fagged as medium-risk, and failed to file a suspicious transaction report despite having enough information indicating that the customer was engaged in money laundering activities.

The FIAU considers the majority of the compliance failings identified to be "very serious", which is made worse by the company's high-risk business model.

The FIAU has issued a follow-up directive to ensure that the issues identified are resolved, which requests that the company prepare a detailed action plan to address all the breaches, which should contain details on the actions to be completed together with supporting evidence, where applicable.

https://fiaumalta.org/wp-content/uploads/2020/12/Publication-Notice-03.12.2020.pdf