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Banking, Financial Services

Sparkasse slapped with €217,000 fine by Malta’s AML watchdog

By Elizabeth Hearst

Maltese bank Sparkasse has been handed down a €217,635 fine by Malta’s anti-money laundering unit (FIAU).

The financial watchdog found “serious shortcomings” in the bank’s money laundering safeguards following an inspection. 

The FIAU conducted an inspection of the Sliema-based bank and discovered that there were failures in keeping customer risk assessments on file. 

It discovered that these risk assessments were only carried out following the establishment of a business relationship and there was a lack of sufficient detail in the risk assessments conducted with one or more of these shortcomings noted in 31 files. 

The bank is accused of failing to accurately scrutinise transactions in customers accounts resulting in single payments processed that exceeded €1 Million. 

Sparkasse is alleged to have failed in their duty to question the voluminous amounts of these transactions and did not attempt to obtain further information in relation to these payments. 

The bank is accused of only carrying out basic checks on accounts held by certain investment service providers with the FIAU labelling the move as “using simplified due diligence” which should have been “reconsidered” on the basis that these entities were making use of “omnibus accounts”. 

In 2018, Sparkasse was embroiled in controversy as it was alleged to have been involved in a Malta-Venezuela money laundering scheme . 

The bank is accused of approving suspicious transactions by local investment firm Portmann Capital which has since seen its operations suspended by the Malta Financial Services Authority (MFSA) for its role in the multi-million euro scheme. 

The Maltese banking sector has seen tumultuous times of late with FIAU fining Satabank €3 Million for money laundering failures, and has since had its licence withdrawn. Similarly, Pilatus Bank’s licence was revoked in 2018 in relation to suspicions of money laundering. 

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