Sparkasse has been slapped with a €217,635 fine by Malta’s anti-money laundering unit (FIAU) after an inspection found “serious shortcomings” in the bank’s money laundering safeguards.
The Sliema-based bank hit the headlines in 2018 for its role in approving suspicious transactions by local investment firm Portmann Capital as part of an alleged Malta-Venezuela money-laundering scheme using funds embezzled from PDVSA, Venezuela’s state-owned oil company.
Portmann had its operations suspended by the Malta Financial Services Authority (MFSA) for its role in the €500 million scheme, which has yet to yield any local prosecutions.
The FIAU said serious shortcomings were identified in relation to the bank’s obligation to scrutinise transactions taking place through its customers’ accounts. It said the failure to scrutinise transactions appropriately was observed on multiple instances, included payments that at times exceeded €1 million.
In other cases, the transactions did not tally with the customer’s profile.
According to the FIAU, Sparkasse neither questioned such voluminous amounts nor did it attempt to obtain further information about the payments from its customers.
Sparkasse was found to have carried out only basic checks on accounts held by certain investment services companies. Furthermore, the FIAU found Sparkasse failed to collect data on source of wealth and estimated size of transactions, instead relying on information provided to it by other entities.
Grey-listing risk
Malta’s banking sector has faced a tumultuous few years, with three banks having their licences withdrawn by the European Central Bank since 2017.
Authorities are now scrambling to avoid a damaging grey-listing by the international Financial Action Task Force.
Last year, the FIAU fined Satabank a record €3 million for a raft of anti-money laundering failures and the bank’s licence has been withdrawn.
Pilatus Bank had its licence withdrawn in November 2018 following suspicions of money-laundering at the bank and the arrest of its chairman on money-laundering charges in the US, since dropped.
Nemea Bank was put under administration by the MFSA in 2016.