Malta’s Financial Intelligence Analysis Unit (FIAU) has taken action against Glitnor Group, a Malta MGA licensee, for its failure to comply with Anti-Money Laundering (AML) regulations. The FIAU has ordered Glitnor to pay a substantial penalty of €236,789, accompanied by a reprimand in accordance with Regulation 21 of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR). This penalty follows a compliance review conducted in 2019, during which the FIAU identified numerous shortcomings in Glitnor’s adherence to AML rules.

Violation related to business risk policy

Glitnor Services Limited, a subsidiary of Glitnor Group, was found to have violated several key areas related to customer and business risk assessments, policies and procedures, customer identification and verification. These deficiencies were deemed to be in contravention of the Prevention of Money Laundering Act and other regulatory obligations, prompting the FIAU to file a disciplinary response against the company.

The FIAU conducted a compliance review in 2019 and identified multiple areas of non-compliance where the company also failed to obtain necessary proof of identity and residential address documents requested within the required timeframe. The FIAU’s enforcement action emphasizes the importance of adhering to AML regulations in the online gaming sector, and Glitnor Services Limited is now expected to revise its methodologies and rectify the identified gaps to comply with the FIAU’s recommendations and legal requirements.

This case serves as a reminder for all entities operating in the sector to ensure full compliance to avoid similar penalties.

Lack of quantitative research data

One particular concern raised by the FIAU was Glitnor’s inadequate approach to Business Risk Assessment (BRA). The company was found to have neglected a comprehensive evaluation of potential threats, lacking the utilization of quantitative data and failing to assess the effectiveness of mitigating measures. Furthermore, the absence of overall risk ratings resulted in an unclear outcome of the risk assessment.

In addition, the FIAU highlighted significant inadequacies in Glitnor’s Customer Risk Assessment policy and procedures. The company failed to adequately consider the four pillars of risk: interface/delivery risk, geographical ML/FT risks, the customer’s Source of Wealth, and product and transaction risk. Notably, the compliance examination revealed a complete absence of evidence of conducting a risk assessments for all customers reviewed, representing a substantial breach of regulatory expectations.

The FIAU also scrutinized Glitnor’s lack of robust policies and procedures, which were found to be either missing or inaccurate during the compliance examination. These oversights were particularly concerning in terms of developing a customer business and risk profile.

Glitnor’s failure to obtain proof of identity and residential address documents within the legal timeframe for certain player files, combined with non-compliance in gathering information about the purpose and nature of business relationships, led the FIAU to conclude that there was a significant shortfall in Glitnor’s compliance with AML regulations.

FIAU’s commitment to the iGaming Sector

This administrative measure imposed on Glitnor Services Limited underscores the FIAU’s unwavering commitment to upholding and enforcing stringent anti-money laundering standards within the remote gaming sector. Companies operating in the sector are advised to strictly adhere to the FIAU’s regulatory requirements, emphasizing the critical importance of implementing robust and comprehensive risk management procedures to safeguard against financial crime.

The Financial Intelligence Analysis Unit (FIAU) in Malta is responsible for the enforcement and regulation of Anti-Money Laundering (AML) and Counter Financing of Terrorism measures. It plays a crucial role in safeguarding the integrity of Malta’s financial system to ensure compliance with AML/CFT regulations.

In relation to the iGaming sector, the FIAY conducts regular compliance reviews and imposes penalties when necessary. It also makes recommendations to ensure that companies operating in the remote gaming sector adhere to robust guidelines in the jurisdiction to combat money laundering and financial crime.

 

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