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MALTATODAY 4 October 2020

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4 maltatoday | SUNDAY • 4 OCTOBER 2020 NEWS Cases 3205 Active 455 Recoveries 2711 Deaths 38 Swabs 260,917 LATEST COVID-19 Enriching Lives, opening minds For further information on this call and guidance on priorities kindly contact EUPA on: 25586132 Erasmus accreditation is a tool for education and training organisations in adult education, vocational education and training (VET), and school education that want to open up to cross-border exchange and cooperation. Deadline for the submission of applications is the 29th of October 2020 at 12pm (noon CET) Accredited Erasmus organisations will gain simplified access to Key Action 1 funding opportunities under the future Programme (2021-2027) KURT SANSONE FIVE cases of suspected mon- ey laundering using remittance agents were referred to the police for investigation by the Financial Intelligence Analysis Unit over the past four years. An FIAU analysis released re- cently shows that between Jan- uary 2017 and May 2020, re- mittance agents submitted 98 suspicious transaction reports. Just over a third of these STRs were linked to suspicion of fraud, 23% were tax-relat- ed and 4% and 3% were linked to organised crime and the fi- nancing of terrorism respec- tively. The FIAU concluded 40 in- vestigations and passed on five of these cases to the Maltese police or other regulatory bod- ies for further action. It also sent six spontaneous intelli- gence reports to foreign FIUs. The FIAU identified major controls weaknesses in rela- tion to the transaction moni- toring systems adopted by the companies offering remittance services. The number of STRs raised by money remitters during the period "is not considered to be sufficient" given the number of transactions processed by these agents. The report says money re- mittance services constitute a significant risk of money laun- dering given the cash-intensive nature of the services, the high speed and/or high volumes of transfers and transfers to high- risk jurisdictions. Remittances are mostly used by migrants and foreign work- ers from non-European coun- tries to transfer funds back to their families at home. Howev- er, they are also used by com- panies and individuals to carry out business transactions. One of the suspicious cases flagged in the report involved a Maltese company that trans- ferred funds through a money remitter and was flagged be- cause the transactions were not in line with its commercial activity. The reason provided by the client for a significant payment was for the purchase of a prop- erty. But the sale agreement provided as supporting doc- umentation for the transac- tions, showed no apparent link between the buyer, the seller, and the client who paid out the funds, raising the suspicions of the money remitter. Another substantial transac- tion was justified by the client through a simple, generic loan agreement. The FIAU said that consider- ing the nature of the transac- tion and the significant amount involved, a robust agreement was expected, with clear terms and clearly identifying the par- ties and specifying their roles. This was not the case, since the supporting documentation did not even specify which party was the lender and which was the borrower. The money remitter also flagged "adverse media" in re- lation to some of the identified parties, which prompted it to file a suspicious transaction re- port. Another case that prompted an STR was the complexity of what should have been a simple transaction between two com- panies. The FIAU said that a company registered in another EU member state, operating in the IT services field, attempted to send a payment to a com- pany incorporated in the US, operating in a completely dif- ferent field. However, it did not choose to do so directly from its bank ac- count in Malta to the bank ac- count of the US Company, but by using the services of a local money remitter. To complicate matters, the narrative of the transaction suggested it was a payment on behalf of a third-party, in- volved in another US company with whom the EU company had an agreement with. The complex structure of the payment, involving many financial institutions, jurisdic- tions and parties, which did not have any apparent or economic lawful purpose gave rise to an STR being submitted with the FIAU. The number of financial in- stitutions providing money remittance activity in Malta is limited to a few institutions. Given the vulnerability of the sector to money laundering, the FIAU said that financial in- stitutions venturing in money remittance activities have to be sufficiently aware of the risks and invest adequately in con- trols that mitigate the risks. STRs filed by money remittance agents Year STRs 2017 14 2018 28 2019 39 2020 17 Source: FIAU Five police investigations into suspected money laundering using remittance agents Remittance agents investigated for money laundering

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