The Financial Sector Supervisory Commission (CSSF) announced in a that it had imposed an administrative fine on the electronic money institution (EMI) Dock Financial S.A. for non-compliance with professional obligations related to anti-money laundering / counter financing of terrorism (AML/CFT). The €40,000 fine was imposed on 19 July 2024 and came after an on-site inspection that occurred between 8 December 2021 and 28 November 2022 covering the AML/CFT framework.

In its communiqué, the regulator noted that it had taken into consideration “the legal and factual elements set out and discussed, the gravity and duration of the breach and the financial situation of the legal person held responsible for the breach existing at the time of the on-site inspection” when determining the type and amount of the sanction.

Details of the breaches

The CSSF provided additional details on the non-compliance. It stated that “a substantial part of the EMI’s client portfolio was not subject to name screening controls on a daily basis, over a substantial period of time.” Moreover, “although the EMI had identified indicators that generated serious suspicions of money laundering in 11 client files, the EMI had reported them with substantial delays to the Financial Intelligence Unit.”

The firm’s “internal governance framework” was found to be “deficient,” in particular “due to insufficient controls performed by the second and the third lines of defence.” The compliance function was not sufficiently staffed to cope with the number of clients, whilst the “compliance monitoring plan did not include any controls on key AML/CFT tasks outsourced to other entities of the same group.”

Furthermore, added the CSSF, “significant deficiencies were not detected by the internal audit function (a third-party service provider), namely the ones subject to the current administrative fine.”

“The money laundering and terrorist financing risk self-assessment did not include all the relevant risks that the EMI faced” and “the EMI applied standard due diligence measures for all its clients, irrespective of their risk rating,” noted the financial regulator’s press release. “The transaction monitoring process did not operate efficiently as the CSSF had identified that some alerts generated were closed without proper investigation or with substantial delay.”

Paperjam has contacted Dock Financial for comment.