Malta’s Financial Intelligence Analysis Unit (FIAU) has imposed a fine of €303,710 ($340,830) on the investment company Southern Cross SICAV plc for numerous AML failures. Specifically, the FIAU found that the company had committed four breaches of the country’s AML/CFT regulations. As a result of these failures, the company invested millions without adequate checks and controls.
The FIAU found that Southern Cross SICAV plc maintained a very generic and outdated AML/CFT Procedures Manual. This manual only outlined the legal obligations that the company had to meet, with no specifics about how it had to do so. The FIAU also noted flaws in the company’s Customer Risk Assessment (CRA) procedures, particularly in how it had been ascertaining the risk related to certain customers. In about half of the files that the FIAU reviewed, the company had conducted CRA after it had already entered into business relationships with the clients.
Southern Cross SICAV plc also failed to meet the legal obligations that mandate the identification and verification of natural persons, legal entities and beneficial owners. Moreover, it did not adequately obtain information related to customers’ anticipated level and nature of activity and funding sources. The company also deviated from usual norms by investing its own money (€1 million, or $1.14m, each) in the businesses of three of its customers with no clear reason as to why it engaged in this activity. The FIAU’s decision on the fine took into account all of these failures of the company.
Source: FIAU, Malta