The Financial Intelligence Analysis Unit (FIAU) of Malta has taken administrative action against Pilatus Bank Plc. for systemic AML/CFT failures. The authority had conducted an extensive compliance review of the bank in 2018. For violating Malta’s Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR), the FIAU has imposed an administrative penalty of €4,975,500 ($57,56,778) on the bank.
Pilatus Bank failed to obtain adequate information and documentation from its customers to know the purpose and intended nature of the business relation and to assess related risks. This was even more problematic given the type of customers the bank was working with – Politically Exposed Persons, customers dealing in high-risk jurisdictions and customers with high net worth or likely to transact millions of dollars annually.
The bank also failed to sufficiently monitor its customers’ transactions, even when they were that were large, unusual, or suspicious. Moreover, the bank approved internal transfers between its customers without conducting the necessary checks. Indeed, in over 86% of the cases, the bank failed to conduct internal reviews of unusual customer transactions, and did not submit a suspicious transaction report to the FIAU even when there should have been suspicions about the funds and transactions being related to ML. Malta’s FIAU took its administrative action after carefully considering the serious and systemic nature of the bank’s failures to meet its AML/CFT obligations.
