A corporate services provider has been fined by the Financial Intelligence Analysis Unit (FIAU) for failing to report suspicious activity by a client that handled “millions of euros”.

The firm, which was not named by the FIAU as it fell under the public reporting threshold, was fined €8,000.

In a report on its website, the FIAU said the firm knew one of its clients was reportedly convicted for “multiple financial crimes”, including money-laundering tied to fraudulent real estate investments.

The client had also been “unresponsive” to requests by the firm for client due diligence documents.

It was only shortly prior to the FIAU’s examination that the firm prepared a memo noting the “red flags” identified, including adverse media coverage and the failure to fulfil persistent requests for due diligence documents.

Despite the memo recommending the client relationship be terminated and a suspicious transaction report filed with the FIAU, the report was only filed following the completion of the anti-money laundering body’s inspection.

The customer had also failed to file annual audited financial statements with the business registry for close to a decade.

It was observed how the last available accounts for the entity serviced by the corporate provider, dating back to 2014, showed “substantive” assets and liabilities reaching into the millions of euros. 

“The magnitude of these figures indicates that the exposure of this customer to the company, in terms of overall activity is considerable,” the FIAU said.  This illustrates the importance of taking proactive and timely steps when unable to complete due diligence checks, the FIAU continued. It said if there is knowledge or suspicions of money-laundering, this must be reported to the FIAU without undue delay.

Multiple court decisions over the past years have struck down FIAU fines for being “unconstitutional”.