A bank in which the church has a majority stake has been fined €228,000 by the FIAU over anti-money laundering failures.
In a statement, APS CEO Marcel Cassar said the announcement of the fine by the anti-money laundering body on Wednesday marked the closure of an examination that helped the bank “further improve our risk and compliance management”.
The FIAU investigation found “various shortcomings” in APS’ risk assessment methodology over a “considerable time period”.
As a result, the bank failed to properly understand the potential financial crime risks posed by its clients.
The FIAU said the customer files it reviewed during its examination identified “numerous deficiencies” in the procedures APS had in place to obtain and assess information on the purpose and intended nature of the business relationship with its clients.
In one case, the anti-money laundering unit noted how a bank client declared plans for over €5 million in deposits, while only declaring a monthly income of €5,000.
“This inconsistency should have raised concerns about the validity of the customer’s declarations and merited further investigation by the bank,” the FIAU said.
The FIAU said following its examination, the bank “proactively rectified” almost all of the file-specific deficiencies identified.
APS was also found to have “inefficient” control measures to prevent money-laundering, as for many years it relied on a manual system of monitoring transactions carried out by its clients.
An automated system has since been implemented, the FIAU said.
In a statement, APS said the FIAU’s findings largely related to “legacy matters”, and significant remediation has taken place in the ensuing years.
The bank said the fine, which it will not be appealing, will have no material impact on its financial performance.
“The Bank is fully committed to the highest standards of operational integrity and regulatory compliance and is a key player in the fight against financial crime.
"Over the past years, the Bank has increased its investment in resources and technology to enhance and increase the effectiveness of its financial crime compliance framework, which had already commenced before the 2020 examination took place,” APS said.
The bank’s CEO said the examination process had helped APS strengthen its governance, systems and compliance controls.
APS said it will be holding a market briefing about the fine on Friday.