Pilatus Bank has been fined for past failures to provide information to the Financial Intelligence Analysis Unit, Malta’s anti-money laundering body.

In a letter tabled in parliament, the bank’s administrator Lawrence Connell acknowledged payment of the €10,000 fine in December 2019.

Connell said the bank was fined for its failure to reply to two requests for information from the FIAU in January 2017.

An inspection at the bank by the FIAU the previous year had found “lax” anti-money laundering controls and a focus on Swiss-style secrecy for Pilatus’ clients, a good number of whom were politically connected individuals from Azerbaijan.

RELATED STORIES

The FIAU had later backed down from its initial findings about the shortcomings after the bank was able to provide information not reviewed during the first inspection.

According to testimony in the Egrant inquiry, Pilatus Bank kept a dual file system, whereby certain information was kept in the operative file and more confidential information in another file.

The FIAU has said it could not establish if documents were withheld during its initial inspection in March 2016.

Pilatus Bank’s licence was stripped by the European Central Bank in November 2018, following the arrest of its founder and chairman Ali Sadr in the US.

An inquiry into the bank’s operations was opened by the police days before the order to shutter the bank was handed down.

That same year, the European Banking Authority had criticised the FIAU’s failure to impose any sanctions on the bank, despite its misgivings about its anti-money laundering controls.

A forensic report carried out as part of the Egrant inquiry found transactions involving the daughters of Azerbaijan ruler Illham Aliyev and the sons of powerful minister for “emergency situations” Kamaladdin Heydarov showed commonly accepted red flags for money laundering.

Then magistrate Aaron Bugeja ordered a police investigation into potential money laundering at the bank.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us