HSBC Malta slapped with €82,000 fine by money laundering watchdog

The FIAU highlighted incidents when high-value transactions went unnoticed by the bank's system • HSBC failed to document justification for a €2 million transaction by one of its clients

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

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

While the bank gave the unit more information on the customer’s business operations, the FIAU said this was not packed up 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.

When deciding the penalty, the FIAU said that 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 even remarked on HSBC’s “constant investment” in technical and human resources with respect to preventing and combating money laundering.