A Malta-based bank has been fined €337,422 for a series of money laundering regulations breaches, including weak oversight over a “very well-known” businessman’s multi-million US Dollar transactions.
In an announcement made on October 19, the Financial Intelligence Analysis Unit said that NBG Bank Malta had breached several anti-money laundering rules.
NBG Bank Malta, formerly Finansbank Malta, was established in 2005 and is a subsidiary of NBG Group based in Greece. It services high-net-worth clients and corporations.
In one of the files reviewed by the FIAU, it turned out that although a customer had been subject to adverse media reports in March 2017, this was only picked up by the bank some three years later.
During that three-year period, the bank had allowed the customer a cash collateral of over $30 million.
It had also allowed two outward transactions amounting to over $35million without obtaining any supporting evidence.
The bank argued that the client’s banking activity was in line with his overall financial and economic profile, as well as the business relationship, since he was “a very well-known businessman”, as had been confirmed from independent sources.
However, upon reviewing these searches, based on the timestamp found on each document, the FIAU found that the bank had only carried out proper due diligence in 2020.
This allowed for the risks of this customer to be unmanaged for a considerable time and allowed transactions to take place without the necessary checks taking place.
Two fines in one
The total penalty handed down by the FIAU is split into two separate fines following two different supervisory reviews.
For the first fine, the FIAU said the bank had failed to reply to requests for information and been late in sharing information on a number of other occasions between January 2017 and March 2018.
For this, the FIAU imposed a €134,500 fine on the bank.
Sources at the authority said that they have started taking a harder line when faced with failures to pass on sensitive information by banks and other entities.
This, they said, is because in some cases such information can help track down major criminals or terrorists.
The FIAU also handed NBG Bank a second fine, totalling €202,922, after uit found breaches of six anti-money laundering provisions.
The authority said the bank’s risk assessment was only finalised in March 2020, despite it having been an obligation since January 2018.
The risk assessment did not include key information such as an analysis of different risk scenarios, the likelihood of any risk materialising and the possible impact thereof.
The expected source of funds for the bank’s customers was not taken into consideration when the bank was formulating its customer risk rating.