The FCMC carried out an on-site and special purpose inspections of the Bank to examine customer transactions until February 2019. The FCMC identified a number of infringements related to the internal control system, customer base risks and their management. The irregularities showed serious shortcomings in the Bank’s internal control system in the AML/TF field, as they were identified in the key elements of customer due diligence and transaction monitoring. The Bank had not established an adequate internal control system to meet its risks in the AML/TF field, which would ensure effective compliance with the regulatory requirements such as:
In view of above, it is concluded that the Bank has not ensured the effective functioning of the internal control system in the field of the AML/TF in a way that its activities comply with the regulatory requirements of the AML/TF; moreover, the breaches are considered as essential and sustainable. At the same time, the FCMC takes into account the progress made by the Bank in addressing shortcomings identified by the FCMC.
The Board of the Bank is responsible for general functioning, while the member of the Board is responsible for the specific scope of the credit institution. The FCMC concluded that Degro, the member of the Board responsible for the field of AML/TF, had not ensured that sufficient measures were taken at the Bank to prevent the Bank from being involved in regulatory infringements. In the light of above the FCMC has issued a warning to that person.
In accordance with the FCMC’s decision, the Bank has to submit to the FCMC a plan of the measures to carry out the legal obligations laid down and to address the irregularities and shortcomings identified and to take the measures provided for in the plan within the specified time limits in order to prevent further irregularities of a similar nature in the internal control system in the field of the AML/TF risk management. Besides, an independent assessment of the appropriateness and effectiveness of the Bank’s internal control should be carried out involving a sworn auditor or a commercial company of sworn auditors.
The amount of the fine imposed on the Bank shall be 80% of the maximum statutory amount, 10% of the Bank’s total turnover. The fine specified for the Bank shall be paid into the State budget within one month from the date of entry into force of this administrative act. The FCMC has not previously applied sanctions to the Bank for breaches of the AML/TF regulatory requirements.
Financial and Capital Market Commission
Phone: +371 67774808, +371 67774807