Maltese finance regulator bemoans “valueless” operator AML checks
Financial Intelligence Analysis Unit highlights lack of EDD in one operator case as suspicious transactions rise 205% in space of two years
Malta’s Financial Intelligence Analysis Unit (FIAU) has reported a 205% increase in suspicious financial transactions in 2020, with gambling and banking listed as the highest risk areas in terms of AML.
A total of 1,668 suspicious transaction reports were received by the FIAU in 2018, rising to 5,090 during 2020.
According to data provided by the FIAU, 11.6% of those reports were found to contain breaches relating to inadequate customer risk assessment, with so-called politically exposed persons accounting for the next biggest area of breach at 7.6%.
In an information notice detailing some examples of investigations into these alerts, the FIAU highlighted several instances where remote gambling operators had conducted information gathering practices which had “no value” in terms of combatting money laundering.
These details, it suggested, garnered base level information and did not aid in the determination of risk of fraud by the players concerned.
In another case cited, the FIAU revealed a lack of due diligence on the part of an unnamed operator.
“A remote gaming operator had not implemented any form of enhanced due diligence (EDD) measures despite having players who are residents of high-risk countries and players engaging in higher risk game types,” the FIAU wrote.
“In fact, one of the players reviewed had engaged in low odds sports betting – which is a betting method that usually ensures a higher chance of winning – and wagered substantial amounts of funds through such games.
“The risk would be that ill-intentioned individuals would make use of these bets to launder proceeds of crime without the risk of losing too much of the funds wagered.
“No measures were implemented by the operator to monitor the relationship more closely and to monitor the activity to determine whether such activity gives rise to suspicions,” the FIAU added.
In a separate example, another operator with “robust” AML procedures requiring mandatory checks on players depositing €2,000 (£1,728) or more was found to have failed to implement these standards in several cases.