HSBC Malta has been fined €82,000 for breaching anti-money laundering provisions.  

The FIAU, Malta's anti-money laundering unit, found the bank failed to adequately document the reason behind a €2m transaction by one of its customers.

In an online notice, the FIAU said that although the bank provided it with more detailed information about the business operations of the customer in question, HSBC did not back this up with invoices or any other supporting documentation for the transaction.

The FIAU said that in another breach, HSBC's transaction monitoring system failed to flag various high-value transactions by one customer, which at times reached €800,000.

HSBC told the FIAU that although the rule in place at the time did not trigger any alerts on the transactions carried out by that particular customer, a "tuning exercise" took place and revised thresholds were put in place for the transaction monitoring system.

The FIAU said the bank also stated that other controls in place did lead it to scrutinise the transactions in question. The regulator also said that the previously established monetary thresholds to monitor large transactions passing through the accounts within a specific time period were too high, thus increasing the risk that certain large and anomalous transactions were not being captured and adequately scrutinised by the bank.

But in three customer files, HSBC failed to gather the necessary documents to verify the identity or address of the beneficial owners or senior managing officials.

However, the FIAU took into consideration the importance of the obligations that the bank
breached, together with the seriousness of the findings identified and their material impact. 

"The Committee also considered whether the breaches identified could have led to the unintentional facilitation of ML/FT. It also considered the impact that the Bank's failures may have had on both its operations, as well as on the local jurisdiction and its financial system. The size and operations of the Bank, and it being a core banking institution in Malta, were also taken into account.

"In its deliberations, the Committee also factored in the good level of cooperation exhibited by the Bank throughout the whole process as well as the constructive and positive dialogue had throughout the years, together with the regard that the Bank has shown towards its AML/CFT obligations. 

"Furthermore, the Committee took into consideration the Bank's long-standing commitment towards enhancing and updating its AML/CFT processes to ensure compliance with its legal obligations, and the remedial actions that the Bank indicated it has already started to implement. 

The Committee also considered the Bank's continuous investment in its technical and human resources tasked with preventing/combating ML/FT."

The full notice is here