HSBC fined €82,000 by FIAU for anti-money laundering breaches

Last Updated on Monday, 5 December, 2022 at 7:38 pm by The Malta Business Weekly

HSBC has been fined €82,000 by the Financial Intelligence Analysis Unit (FIAU) for violating local anti-money-laundering laws.

In an online notice, the FIAU said that the bank had failed to document the justification for a €2 million transaction by one of its clients.

FIAU said that while information on the customer’s business operations was provided by the bank, this was not supported by invoices or other transaction-related evidence.

In a separate case, the FIAU said the bank’s transaction-tracking system failed to alert the company to a number of high-value transactions from a client.

Some of these transactions topped €800,000.

HSBC said that the rule in effect at the time had not caused any warnings to be sent on these transactions. However, the bank has since conducted a “tuning exercise” and set up new thresholds in its monitoring system.

The FIAU flagged that the monetary thresholds established at the time were too high, increasing the risk of significant and anomalous transactions passing by without sufficient examination.

It also pointed out that HSBC failed to compile the required paperwork to confirm the identity or residence of the beneficial owners or senior managing officials in three client files.

The FIAU said that, in establishing the penalty, it took into account HSBC’s “excellent level of cooperation” and communication throughout the years, as well as the bank’s demonstrated respect towards anti-money-laundering requirements.

The FIAU also remarked on HSBC’s “constant investment” in technical and human resources with respect to preventing and combating money laundering.

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