Fimbank in Malta fined for “serious anti-money laundering failures”

Fimbank was recently fined €168,943 by the Financial Intelligence Analysis Unit (FIAU) for “serious shortcomings” in its anti-money laundering obligations.

As a result of an inspection of the bank, the FIAU found Fimbank’s risk assessment tools didn’t take into account all of the countries its clients were transactng with.

The FIAU said the examination identified weaknesses in the bank’s ability to retrieve records in an efficient manner also. The FIAU therefore deemed that the bank’s record-keeping measures were not adequate for the obligations in place on such a financial institution.

Serious shortcomings were found when it came to the bank’s obligation to scrutinise its clients’ transactions. While the bank did have some transaction monitoring measures in place, the FIAU said the measures were not reasonable to the proportion of Fimbank’s activities.

The FIAU commented that, at times, individual transactions through the bank’s accounts exceeded €13 million and in other cases, the transactions did not appear to fit with the customer profile, with the bank failing to thoroughly scrutinise the movements that were taking place.

While investigating one transaction, the FIAU found a client was loaned money to buy a ship, yet the vessel was in fact bought by a third party.

The vessel was then resold, however, all the funds from the sale were sent to the bank’s client instead of the company that bought it.

The FIAU said the bank didn’t question this particular arrangement, but had relied on its understanding that these were intra-group transactions, and this even though there was adverse media available on the company from which the vessel had been originally acquired.

The FIAU also stated that Fimbank was already undertaking remedial action at the time of the 2018 compliance review and has already started implementing measures to address the other breaches.

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