Recent developments involving Pilatus Bank were “embarrassing”, Danièle Nouy, chairwoman of the European Central Bank’s supervisory board said, calling for new anti-money-laundering laws by the EU.
Addressing a meeting of the European Parliament’s Economic and Monetary Affairs Committee, Ms Nouy admitted the ECB was not responsible for the monitoring of banks and other financial institutions allegedly used for money-laundering activities because that was the competence of regulatory authorities in EU States.
However, she agreed that the EU should beef up its mechanisms in the area, even through a new legislative set-up specifically aimed to counter possible money-laundering activities.
Questioned by MEPs on what the ECB supervisory body was doing to see that what had happened in Malta with Pilatus Bank and in Latvia with ABLV Bank would be avoided in future, Ms Nouy agreed it was embarrassing that such issues had been unearthed by the United States authorities even though they involved crimes allegedly happening on EU soil.
“I agree with you that it’s very embarrassing to depend on the United States to do the job. This has to change,” she said.
The Malta Financial Services Authority was forced to take steps against Pilatus Bank after its chairman, Seyed Ali Sadr Hasheminejad, was arrested in the US in connection with charges of money laundering aimed at breaching sanctions against Iran.
The regulator ordered that Mr Hasheminejad be removed from his position and that all the bank’s transactions be frozen.
In 2016, a leaked Financial Analysis Intelligence Unit report, passed on to the police for further investigation, found “glaring, possibly deliberate disregard” for money-laundering controls at Pilatus Bank, which was licensed to operate in 2014.
Pilatus denied any wrongdoing, and a subsequent FIAU visit found that the issues that it had identified “no longer subsist”.
Pilatus officials told MEPs during their fact-finding mission in Malta to assess the situation regarding the rule of law that after the FIAU’s initial report, KPMG had been asked to audit the bank’s activities and concluded their obligations needed minor corrections to prevent money laundering.
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