Updated at 2pm with AWS Malta statement.
A financial services company has been fined €502,000 for a series of money laundering regulations breaches, the FIAU has announced.
In an announcement made on August 6, the Financial Intelligence Analysis Unit said that AWS Malta, a payment and money transfer company, had breached a number of anti-money laundering rules.
The firm is owned by AWS Switzerland, and its Maltese directors include lawyer Jean-Pierre Gauci-Maistre, chief financial officer Steven Zammit Cutajar, and Mark Portelli.
In a statement on Monday, the company said it planned to appeal the administrative fine.
The company said the services it had provided are in line with the Payment Service Directive and that it is licensed to act as a payment services institution to undertake money remittance services.
AWS added that its money remittance services "are limited to clients who remit monies exclusively from licensed banks (either directly or by means of a credit/debit card issued by the bank) through EU regulated payment service providers."
FIAU gives examples of abuses it detected
During a compliance examination, conducted last year, officials from the FIAU said they uncovered deficiencies within the company’s policies and procedures.
In one file inspected by the anti-money laundering watchdog, a Sri Lankan national was found to have been actively transacting since January 2017. However, the company had only opted to request enhanced due diligence information three years after Sri Lanka was listed on the FATF’s high risk jurisdiction list. The company had already allowed over 220 transactions through.
Following the company’s eventual request for further information, the customer opted to halt transacting with them.
“Hence, the company, for over three years, disregarded the high money laundering and financing of terrorism risk posed by this customer,” the FIAU said.
In another file reviewed, over a period of three and a half years, a customer remitted a total of 1,096 transactions to the Philippines amounting to $402,450 and €24,000 respectively.
The client had claimed the transactions were “to aid the customer’s several Philippine friends according to what they require”.
Some examples included medical assistance, the purchase of a new phone, assistance in setting up a beauty salon, and other purchases of services and goods.
The customer’s stated source of wealth for these transactions was his monthly pension and a personal line of credit. The FIAU said the company ought to have collected further information and documentation to have a better insight into the source that was funding such transactions.
In yet another file, 563 transactions were made by a customer to India over a five-year period.
The stated purpose was to pay for family maintenance costs, school and college fees and other miscellaneous expenses. Despite collecting information on the customer’s savings and salary, a significant discrepancy remains between the customer’s wealth and total funds remitted.
The FIAU said that the customer had approximate savings of $70,000 and salary earnings of approximately $259,200, however, remitted funds amounting to over $800,000 and €300,000 respectively.
Moreover, the cumulative high value of the transactions passing over to India should have led the company to ensure that the information provided by the customer was accurate.
“The seriousness and systemic nature of these findings led the committee to impose an administrative penalty of five hundred two thousand forty-six euro (€502,046),” the FIAU said.
Inadequacies in risk assessment
The FIAU also highlighted inadequacies in the company’s risk assessment, including in its reviews of untrustworthy jurisdictions.
It also determined that the service provider had failed to maintain an efficient record-keeping procedure and in being able to retrieve information in a timely manner.
The FIAU acknowledged that the company has already started remediation procedures to be implemented to enhance its system, however the systematic deficiencies identified in the company’s methodology could not be overlooked.
The agency also positively acknowledged the actions already taken by the company and the actions planned to be taken by it to remediate the failures identified during the compliance review.
To ensure that the company’s remediation plan is adhered to, the FIAU has also issued a follow-up directive, through which it requested a detailed action plan.