SBC News Malta FIAU fines Glitnor €240k for AML failings 

Malta FIAU fines Glitnor €240k for AML failings 

The Financial Intelligence Analysis Unit (FIAU) of Malta has ordered Malta MGA licensee Glitnor Group to pay €236,789 for non-compliance with Anti-Money Laundering (AML) rules. 

The penalty is related to a compliance review carried out in 2019, and includes a reprimand in line with Regulation 21 of the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR).

The FIAU found that ‘Glitnor Services Limited’ had failed in several key areas related to customer and business risk assessments, policies and procedures, customer identification and verification, and understanding the purpose and intended nature of business relationships.

The deficiencies were in violation of the Prevention of Money Laundering Act (PMLA) and other regulatory requirements, leading to the FIAU’s stern administrative response against the company.

Of concern was Glitnor’s inadequate approach to Business Risk Assessment (BRA). The company was deemed not to have conducted an exhaustive evaluation of potential threats, lacking quantitative data usage, and failed to evaluate mitigating measures’ effectiveness. Additionally, the overall risk ratings were missing, rendering the outcome of the BRA unclear.

Furthermore, the FIAU highlighted the inadequacy of Glitnor’s Customer Risk Assessment (CRA) policy and procedures. The company did not properly consider the four risk pillars: interface/delivery risk, geographical ML/FT risks, the customer’s Source of Wealth (SoW), and product and transaction risk. 

Alarmingly, no evidence of conducting a CRA was found for all customers reviewed during the compliance examination, which was cited as a significant breach of regulatory expectations.

Also under the FIAU’s lens was Glitnor’s lack of rigorous policies and procedures, which were found to be missing or inaccurate at the time of the compliance examination. These oversights were particularly concerning regarding the requirement to develop a customer business and risk profile.

Another major non-compliance area involved the company’s failure to obtain proof of identity and residential address documents for certain player files within the legal timeframe. Coupled with non-compliance in gathering information about the purpose and intended nature of business relationships, the FIAU concluded there had been a significant shortfall in Glitnor’s compliance with AML regulations.

The imposition of the administrative measure on Glitnor Services Limited underlines the FIAU’s commitment to uphold and enforce stringent AML/CFT standards within the remote gaming sector. Companies operating within this domain must adhere to these regulatory requirements, underscoring the importance of robust and comprehensive risk management procedures to safeguard against financial crime.

Glitnor Services Limited is expected to revise its Business and Customer Risk Assessment methodologies and rectify the identified gaps in their policies and procedures to comply with the FIAU’s recommendations and the prevailing legal requirements. This case serves as a critical reminder for all entities within the sector to ensure complete compliance to avoid facing similar hefty penalties.

In response to the ruling, Glitnor Group said: “Following the recent fine handed by the FIAU on the 26th of June 2023, Glitnor indicates that the inspection took place in 2019 (approx. 4 years ago) shortly after Glitnor received its license from the MGA and further acquired its platform and player base.

“Given the fine imposed, Glitnor Group and its Legal advisors disagree with the findings and will be exercising its right to appeal.”

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