€3.1 million in fines by FIAU throughout 2022

In 2022, the Financial Intelligence Analysis Unit (FIAU) issued more than €3.1 million in fines to companies and individuals found to be in breach of the Prevention of Money Laundering Act.

Of those more than €2.75 million were fines issued to 30 companies or individuals. The remained were administrative penalties issued for late or non-compliance with FIAU requests or directives.

The FIAU is the national central agency in Malta that is responsible for the collection, collation, processing, analysis and dissemination of information to combat money laundering and the funding of terrorism.

In most of the cases, the FIAU found that the companies' business risk assessment was not comprehensive and did not provide the criteria used to identify specific scenarios.

These companies often did not clarify the way that the BRA was implemented and how each risk factor and risk criteria within each factor was considered.

Customer Risk Assessments (CRA) were also missing in many cases, or the companies had not provided any policies or procedures which explained the methodology and risk factors that should be taken into consideration when carrying out the CRA.

The compliance review of a number of companies identified several instances where the obligation of customer due diligence was not adhered to.

One company was fined because in one file, it did not obtain and provide any documentation which could verify the identity and residential address of the player.  In another file, the document obtained by the Company to verify the permanent residential address of the player did not bear an issue date and the document was not as a minimum a utility bill. Another file was also in breach because the document obtained by the company was unclear and illegible.

In other cases, the FIAU found that the contents of policy documents including those on Anti-Money Laundering/Combating the Financing of Terrorism policies and procedures, the customer acceptance policy and the BRA diverged from each other.

Administrative penalties imposed by the FIAU following an assessment of late or non-submissions of the 2021 Risk Evaluation Questionnaires amounted to €93,600.

Moreover, the FIAU issued a total of €15,520 in fines following the failure of a number of subject persons to complete the Subject Person Profile within the stipulated deadline.

In addition, the FIAU issued a total of 36,435 requests for information from January 2020 to June 2021. These were mostly credit institutions, financial institutions, remote gaming companies and investment service providers.

Failure to reply to requests for information or the late submission of responses led to 171 ‘potential breaches letters’ being issued, with the majority of cases being remote gaming operators.

Following the evaluation of all cases and corresponding representations, the Committee decided to impose an administrative measure on 119 distinct subject persons. These consisted of pecuniary fines totalling €304,550 imposed on 67 subject persons and written reprimands imposed on 52 subject persons.

Whenever the findings warranted, and in line with the FIAU’s policies and procedures, an amalgamation of administrative measures including both a reprimand and a pecuniary penalty were imposed on subject persons.

Minister details amount fines collected between 2019 and 2022

Replying to a parliamentary question by Nationalist MP Jerome Caruana Cilia on Monday and Tuesday, Finance Minister Clyde Caruana said that in 2019 the FIAU issued 20 fines, and collected €37,050.

The minister said in 2020, the FIAU issued 170 fines and collected €2,103,277. The amount also includes fines imposed in 2016 and 2018 which were collected in 2020.

In 2021, the FIAU issued 176 fines, and collected €1,184,317 in fines. The figure includes a fine which was imposed in 2018.

The minister said in 2022, the FIAU issued 145 fines, and collected €3,557,701.