FIAU slaps financial services provider with €94,000 fine for anti-money laundering failure

Malta’s Financial Intelligence Analysis Unit (FIAU), has hit a locally-registered financial services provider with a fine of more than €94,000, after identifying significant deficiencies in its anti-money laundering (AML) regimen.

In the FIAU’s announcement of the sanction, it stated that it has imposed a €94,868 fine against N Trust, following a review earlier this year.

The firm primarily focuses on the incorporation and administration of corporate structures, and is owned by trio Claire and Kathleen Mizzi, and Antoine Naudi, who also operate law firm Naudi Mizzi & Associates.

On the firm’s website, it advertises the services of N Trust, proclaiming that its team of professional can provide “the discretion and expertise” required by clients.

The FIAU’s notice revealed that it has reviewed seven customer files from amongst N Trust’s clients.

It stated that all of these customers had the same three ultimate beneficial owners (BO), but that in 2019, a fourth owner was added, meaning that none of the owners held the 25 per cent stake required for them to register on Malta’s beneficial ownership registry.

Additionally, the owners are reported to have held investments reaching as high as €2.5 million each, earning them a substantial return over only one and a half years, even though according to the FIAU it would have been customary to hold them for longer.

The organisation also added that “early redemption is usually associated with money laundering risks.”

Despite these risks, the FIAU reported that N Trust did not carry out the necessary checks to build a comprehensive customer profile, to monitor the business relationships, conduct enhanced due diligence to obtain sufficient documentary evidence to “ensure a thorough and comprehensive understanding of the SOW (source of wealth) of the BOs.”

Furthermore, N Trust was found to have failed to provide proof that the funds were remitted from the company that was investing these amounts in the company.

It was also only provided with a copy of the bank statement showing the respective amounts that the customer company was receiving from the BO.

Delivering its judgement, the FIAU stated that it based its decision to deliver the sanction on the overall lack of regard portrayed by the company in abiding with its AML/ CFT obligations, the lack of appreciation for the money laundering risks it was exposed to, the fact that customer companies were all liquidated together, and the good level of cooperation exhibited by N Trust, as well as its size.