Issue link: https://maltatoday.uberflip.com/i/1489264
3 maltatoday | SUNDAY • 1 JANUARY 2023 NEWS 2090 8600 COLLECTION OF DOMESTIC WASTE MATTHEW VELLA A Maltese foreign exchange platform has been fined over €226,000 by the Financial Anal- ysis Intelligence Unit over short- comings in its risk compliance and due diligence of clients. Triton Capital Markets (previ- ously FXDD Malta) provides in- terbank foreign exchange pric- ing to clients around the world. Its website gives investors, trad- ers and money manages access to trading facilities in currencies and precious metals. Triton Capital Markets in- cludes former BOV chief execu- tive officer Tonio Depasquale as one of its directors, and is owned by American businessman Emil Assentato, who has founded var- ious currency and securities ex- change companies. The FIAU found various short- comings in the company's busi- ness risk and cutsomer risk as- sessments, as well as a lack of enhanced due dilegence on var- ious clients, included political- ly-exposed persons. In four files reviewed, PEP identification measures were not done for all the individuals involved. Concerns were height- ened since these clients had been on-boarded under a less stringent regulatory regime in the United States than that cur- rently in force in Malta. "PEPs pose a high risk of ML/ FT due to the position they oc- cupy and the influence they may exercise through their promi- nent public function," the FI- AU said. "Risks include those of being involved in corrupt prac- tices, accepting bribes, or abus- ing or misappropriating public funds. The failure to carry out checks to determine whether a customer is politically exposed or otherwise exposes a subject person to a heightened risk of ML/FT without the necessary mitigating measures being em- ployed." The FIAU also said that no business risk assessment existed in the company, either at inter- view stage – when the BRA was said to be in its final stages – or even at the compliance review. The FIAU said that without a BRA, Triton had "diminished both its ability to comprehen- sively identify the threats and vulnerabilities to which it was exposed and to adequately im- plement the necessary controls to mitigate the risks." In 20% of the files reviewed, the FIAU said the compay had failed to obtain the necessary identification and verification of natural persons as required. "There were instances where the residential address verified did not tally with the one provided by the customer at onboarding, and yet the company did not question this. Similarly, at times the identity information did not match and yet again the Com- pany did not enquire about this discrepancy." In eight cases reviewed by the FIAU, no enhanced due dili- gence (EDD) was applied, find- ing its risk matrix for such high- risk corporate entities had been "generic and non-comprehen- sive since most of the measures focused on obtaining verifica- tion documents or validating the customer's residential address." In one case, the file did not contain adequate EDD measures to counteract the risks emanat- ing from political connections. Insufficient documentation was collected for source of wealth and expected source of funds to be used in the business re- lationship. The FIAU said the company was "at least expected to take adequate measures to be satisfied that it does not handle proceeds derived from corrup- tion or other criminal activities which are risks associated with a customer who was a PEP (politi- cally exposed person)." The latter was more impor- tant since during the file review it was noted that the customer had initially intended to open an introducing broker relation- ship, however, it was then decid- ed that they would trade their own funds. "Understanding the provenance of the funds and the PEPs wealth was thus indispen- sable," the FIAU said. In another case, a customer stating they were a self-em- ployed biologist with an annu- al income between $25,000- $50,000 declared they were depositing less than $25,000. The FIAU said that the compa- ny should have obtained further information on such a client. "Indeed, the company did not have an understanding as to the expected source of funds, as well as how such funds would be sourced. The company had also failed to obtain informa- tion on the customer's source of wealth. Such information is even more important since there was a great discrepancy between the estimated annual income ($52,000) and the customer's net worth ($900,000)." FIAU slaps €226,000 fine on forex trader