BOV hit with €2.6 million FIAU penalty

The bank failed to obtain basic identification details of the beneficial owners of almost 2,500 corporate customers

The FIAU has imposed a €2.6 million fine on Bank of Valletta for failing to report beneficial ownership information on almost 2,500 corporate customs in the Central Bank Account Registrar.

According to the FIAU, the Bank had obtained basic identification details of the beneficial owners of a number of corporate customers through a bulk exercise carried out in June 2021 from the Beneficial Ownership Register maintained by the Malta Business Registry (MBR).

Prior to this, the Bank either held no beneficial ownership information or had only incomplete beneficial ownership information on 1,298 customers, while having no information whatsover on the remaining 1,144.

"The Committee expressed its concerns at the Bank’s failures and commented that the obligation to understand who the individual(s) behind a corporate customer is, is considered as one of the most basic and essential steps of customer due diligence. Without such information, the Bank was essentially unaware whom it was ultimately servicing," the measure notice reads.

BOV said it took immediate action and collaborated with the FIAU in a full and transparent manner. 

Rick Hunkin, Chief Executive Officer of Bank of Valletta said, “Bank of Valletta takes its responsibility towards regulators extremely seriously; there can be no excuse for a violation of CBAR reporting and this fine is a harsh but important reminder of the need for our systems to be flawless”.

He added that the bank is on course to modernise all processes and procedures and strengthen training requirements for staff.

“The Bank is committed to implementing best in class practice systems and being fully compliant with FIAU and international standards.”

BOV said the fine will not have any significant impact on its financial or capital position, and the bank remains well-capitalised and profitable.

Fine is shameful to both the bank and the country, says PN

In a statement PN MP Mario De Marco said it’s shameful for Malta, that its primary bank, was fined €2.6 million for failing to observe the laws of the country and those against money laundering.

“This does not augur well for the efforts of the country, to get out of the FATF grey list”

De Marco mentioned how the FIAU said BOV was not acting according to law, when it comes to data gathering to determine who was truly the owner of companies that had accounts with the bank.

“This could have occurred only for two reasons, carelessness or worse, to cover up information related to individuals or companies that were using Bank of Valletta to deposit their funds and borrow money. Either way, this is very worrisome,” De Marco stated.

PN called on the bank and politicians to assume responsibility for this “grave shortcoming”, that apart from tainting the reputation of the country, it said will also affect the thousands that invested their money into BOV.

The party remarked how BOV has not paid any dividends for the last two years, “using COVID as an excuse”. It said the money to be paid for the fine should have gone to the shareholders.