By PAUL O’DONOGHUE, Senior Correspondent
CHINESE payment platform Alipay has been fined €214,000 by Luxembourg’s financial regulator for ‘important’ breaches of AML (anti-money laundering) rules.
It follows an on-site inspection by the Commission de Surveillance du Secteur Financier (CSSF) from June 2023 to January 2024.
The regulator said Alipay “committed important breaches to [Luxembourg’s] AML professional obligations”
The CSSF found issues with:
- Transaction monitoring
- Slow alert processing times
- Missing customer identification documents.
- Insufficient oversight of outsourced compliance functions
Alipay failed to file suspicious transaction reports in six cases related to counterfeit goods. Three of these cases were closed without notification to the Financial Intelligence Unit. The CSSF stated this violated the requirement to report promptly when suspicion exists.
Regarding the slow alerts. The regulator said these delays undermined the company’s ability to respond quickly to suspicions of money laundering or terrorist financing.
The CSSF also said these delays meant the firm could not “apply restrictive measures in financial matters without delay if need be”.
Regarding customer identification, the regulator also found issues. Alipay did not apply safeguards for “non-face-to-face business relationships“. The CSSF described the company’s internal controls as “too generic.
The inspection also revealed problems with outsourced compliance functions. The monitoring of these arrangements was insufficient. This meant “the second line of defence did not perform regular controls” on a third party’s obligations.
The CSSF also said that Alipay had implemented corrective measures after the inspection.
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