Do I Really Know You?
Hamad Alhelal, CAMS

Last week, we reported on the newly released 2020 Basel AML Index and the importance of a more dynamic approach to country risk ratings, and risk in general. Malta represents a perfect case study. Just last year, a month before the release of its FATF Mutual Evaluation, Malta ranked 113 out of 125 countries placing it among the lowest risk countries on the 2019 Index. Yet, in 2020, Malta plunged an unprecedented 60 places and is now considered the highest risk jurisdiction in the EU. While Malta has committed to significant reforms, the island nation finds itself in the spotlight again this week in connection with the ongoing Wirecard scandal and “a powerful arm of the ’Ndrangheta, one of Europe’s most dangerous mafia organizations.”

This week, the FT reported that Wirecard processed payments for a Maltese online casino that Italian authorities determined laundered illicit funds for various organized criminal groups, primarily the powerful Calabrian ’Ndrangheta. Yet, despite the various allegations and a 2016 OCCRP investigation that exposed the links, Wirecard continued to do business with CenturionBet, which was owned by a Panamanian shell company, up until 2017 when its gaming license was suspended by the Maltese authorities. According to the FT, a former Wirecard employee “recalled that after press reports of mafia links at [another] larger Maltese gambling company, a compliance review was carried out, but the company passed on the basis of assurances provided.”

While the latest Wirecard disclosures reinforce the importance of perpetual relationship monitoring, its applicability also extends to those doing business with the entity, including its investors, who’ve seen the German unicorn’s share price fall to $1. With an increasingly complex and fast-changing operating environment, whether due to an unprecedented global pandemic or increasing geopolitical tensions, it's vital that a more holistic and perpetual view of non-financial risk be instilled to guard against potential exposure.

As the Sigma-sponsored ACFCS FinCrime Virtual Week comes to an end, we are excited to share with you our latest whitepaper titled ‘Take the Drama Out of Periodic Reviews With Perpetual Relationship Monitoring.’

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