EFG Capital International has agreed to pay a fine of $ 650,000 as part of a settlement with the Financial Industry Regulatory Authority (Finra).
From 2018 to 2021, EFG customers, some of whom are set as a high risk based on their geographical location or other factors, which are sent and received about $ 5.5 billion in cable transfers, including transfers related to the jurisdictions that EFG is high.
The policies and processes of the company AML required the company to monitor these cable transport for potentially suspicious activity, including the activity that includes high -risk geographical locations and transport that are inexplicable, unusually large or present unusual standards.
However, EFG has failed to establish and implement policies and procedures that could reasonably be expected to detect and cause to report suspicious cable transport in four respects.
First, from May 2018 to November 2021, the company did not attend about 900 wire transfers totaling $ 305 million for suspicious activity, including transport sent to or from countries where the company was designated as a high risk, because these transport was not transported to the AML.
After the company’s 2018 AWC, the company began using the AML automated monitoring tool to review cable transfers for company customers who deposited their account assets with one of its subsidiaries.
However, as a result of the delays of data transmission between these subsidiaries of banks and the business, information on the approximately 900 cable transfers was not transmitted to the AML of AML monitoring until the day of wire activity was executed. Consequently, the AML monitoring tool was unable to inspect or create alerts to these cable transfers.
During the same period, EFG did not make any validation to ensure that the AML automated monitoring tool was timely recording of all cable transport. EFG detected the delays in late 2021 when it responded to FINRA information requests and in January 2022 it took corrective action.
Secondly, from January 2020 to August 2022, a notice to the AML automated AML monitoring tool designed to analyze $ 100,000 or more shipped or received by a jurisdiction that the company set as a high risk. These cable transfers were “red flags” according to the policy of the business of the business. When these transactions were identified with this notice, the company was obliged to evaluate them and examine them for further investigation, but because the notice was not in operation, the company did not reasonably monitor these cable transfers as required by the company’s AML policy.
The EFGs used country codes associated with wire transport to activate the notifications related to high -risk jurisdiction. In January 2020, due to a encoding error, the country’s codes for high -risk jurisdictions were defined in the Code for the United States. Thus, a transfer sent to or by a high -risk jurisdiction will appear in the company’s AML monitoring tool as if it were a transfer to or from the United States. As a result, from January 2020 to August 2022, this tool in the company’s automated AML monitoring system did not cause notifications, which influenced cable transport totaling about $ 30 million.
Thirdly, from January 2019 to December 2021, the company failed to reasonably execute some periodic account revisions that were an element of the AML program to monitor and report suspicious transactions.
The business did not reasonably, stable and timely completed some periodic revisions. The delays in executing these periodic revisions influenced the business of the business because, in the absence of notice, the customer’s activity would not have been revised in time to confirm that it fulfilled the business’s expectations for the account. It may also have influenced the monetary thresholds used to signal activity to the company’s AML monitoring tool, including cable -related notifications, because the thresholds were based on customer risk assessment.
Fourthly, during the relative period, the company failed to conduct AML surveys in cases where other financial institutions rejected the cable transfers transmitted by EFG customers for compliance with customers, including customers that EFG was set as high risk.
As a result, EFG violated the FINRA 3310 (A) and 2010 rules.
In addition to a fine of $ 650,000, the company agreed on a accusation.