Monaco slaps UBS with €6 million money laundering fine

Money laundering: UBS fined €6 million in Monaco Keystone-SDA

Monaco's financial markets watchdog has fined UBS €6 million for "numerous serious breaches" in money laundering and terrorist financing controls.

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“The number and repetition of these shortcomings demonstrate an overall failure in the institution’s compliance and internal control system”, reads the decision published on the website of the Monegasque Financial Security Authority (AMSF) and reported by the Gotham City and Inside Paradeplatz media.

Examining a period from 2018 to 2023, the AMSF noted delays in the transmission of suspicious transaction reports and in the preparation of its global risk assessment.

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UBS was also unable to comply with its the legal requirement to verify the identity, income and beneficiaries of its clients. This was “despite the intrinsic risk presented by its client base, more than half of which is classified as medium to very high risk”.

The Monaco subsidiary of UBS failed to identify and verify the identity of the chains of ownership and control of its customers with complex structures (more than three levels of ownership between the account holder and the beneficial owner).

Nor did it corroborate the background of its high-risk customers, such as politically exposed persons (PEPs), or check the consistency of certain transactions, points out the AMSF.

Unjustified transfers

In the 77-page verdict, several “transactional alerts” are cited by way of illustration, including two outgoing transfers of $400,000 each to a client’s personal accounts in Lebanon and Saudi Arabia, for which the analysis was limited to the allegedly recurring nature of the transactions, without any precise documentation of their purpose.

Or an outgoing transfer of €500,000 to a jewellery company owned by a customer, which was justified on the basis of an invoice for only €73,000.

Contacted by AWP, Switzerland’s largest bank “takes note of the administrative sanction” and is currently examining this decision, reiterating that it is “committed to complying with the highest regulatory standards and remains focused on serving its customers”.

In addition to the financial penalty “proportionate to the average net banking income of the last three financial years” of the subsidiary, amounting to some €132.2 million, the AMSF has decided to publish the decision on its website in named form for a period of five years.

This decision, notified at the end of April, may be appealed within two months.

Adapted from French by AI/mga

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