FIAU fines corporate services provider €8,000 over AML failures

Malta’s Financial Intelligence Analysis Unit (FIAU) has imposed an administrative fine of €8,110 on a corporate services provider following an offsite compliance examination conducted in October 2022. The fine, issued on 10th September 2024, was due to the provider’s failure to meet anti-money laundering (AML) obligations, particularly around external reporting of suspicious activity.

The investigation revealed that the company had failed to submit a Suspicious Transaction Report (STR) regarding a customer despite numerous red flags. These included adverse media coverage linking the beneficial owner (BO) of the customer entity, Mr A, to money laundering convictions in 2018 related to fraudulent real estate investments. Additionally, internal attempts to obtain crucial client due diligence (CDD) documentation had been met with repeated delays, with missing or incomplete documents dating back to 2018.

Notably, a related entity within the same group as the corporate services provider had already filed an STR on other companies linked to Mr A. However, the Malta-based provider delayed submitting its own report until several weeks after the compliance examination.

Further red flags included the fact that the customer had not filed its financial statements with the Malta Business Registry (MBR) since 2015. Despite the significant activity reflected in earlier records, the company failed to act on the accumulating risks over the course of several years.

In response, the FIAU stressed the seriousness of the company’s delayed response, noting that despite some positive steps taken, a more timely action was warranted. The fine serves as a reminder of the critical importance of timely and thorough compliance with AML and Countering the Financing of Terrorism (CFT) obligations to safeguard the integrity of the financial system.

This case underscores the need for corporate service providers to maintain vigilance, especially in the presence of adverse media and non-cooperative clients, and to take swift action when necessary to uphold their legal responsibilities.

The company may appeal the fine before the Court of Appeal within the prescribed period.