Malta's Financial Intelligence Analysis Unit (FIAU) has fined one of the island's banks which it said did not have adequate business and customer risk assessment measures in place.
ECCM Bank was fined €310,000 for the anti-money laundering transgressions, the FIAU said in a statement in late December.
Although the FIAU conceded that ECCM's business model exposes it to fewer risks than other banks, it said the bank still has an obligation to carry out a comprehensive business risk assessment in a timely manner.
The FIAU noted that most of the bank's customers were classified internally as being from moderate to low risk.
These risk ratings did not reflect the actual money-laundering risks posed, particularly when taking into account some of the complex corporate structures held by some of its clients.
The FIAU said the risk ratings assigned by ECCM to its customers did not consider all the risk factors and, therefore, could have resulted in a "distorted" understanding of the risks involved and in the incorrect application of internal controls.
It was also found that the bank failed to carry out periodic reviews of the money-laundering risks posed by existing customers.
The FIAU further said the bank must take the necessary remedial action to improve its anti-money laundering controls.
To read the full statement, click here.
