Updated to include reaction from the FIAU and the Opposition
The European Banking Authority found that the Financial Intelligence Analysis Unit breached EU law in relation to its supervision of Pilatus Bank.
The EBA issued its recommendation, which aims at remedying the particular failings it identified by encouraging the FIAU to take all the necessary actions to comply with the Anti-Money Laundering and Countering Terrorism Financing Directive (AML/CTF).
Following the European Commission’s request of 23 October to investigate a possible breach of Union law (BUL) regarding the apparent failure of the Maltese FIAU and the Maltese Financial Service Authority (MFSA) to effectively supervise Pilatus Bank Ltd in relation to its AML/CFT obligations, the EBA conducted a preliminary enquiry, including an on‐site visit to the Maltese competent authorities.
In particular, the EBA’s preliminary enquiry on the FIAU aimed at understanding the extent to which its approach to AML/CFT supervision and enforcement in relation to Pilatus Bank Limited had been effective and in line with Union law.
On 23 May, the EBA opened an investigation into the FIAU. The EBA concluded that the FIAU failed to conduct an effective supervision of Pilatus Bank due to a number of failures, including procedural deficiencies and lack of supervisory actions by the FIAU after its decision to close the case without imposing any sanctions on the bank.
Despite the several measures taken by the FIAU to remedy the identified failures, the EBA deemed these measures as not sufficient to satisfy the deficiencies that led to the launch of the investigation.
The FIAU has 10 working days to ensure compliance with EU law.
The EBA’s preliminary enquiries in relation to the MFSA are still ongoing.