Luxembourg Fines Wealth Management Firm $841K for Sanctions Compliance Violations
Luxembourg authorities on April 23 assessed an over $841,000 administrative fine against wealth management firm Fuchs & Associés Finance S.A. for anti-money laundering and sanctions compliance violations.
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Luxembourg's financial services regulatory wing said the firm's trading desk "was deficient at several levels" in terms of "onboarding new business relationships." Fuchs failed to apply "any customer due diligence measures" even when it had doubts about the "true identity of the beneficial owners" of some of its clients.
"The Entity had not attempted to clear its doubts, to terminate the business relationship or to refrain from carrying out transactions and had not considered whether a suspicious transaction report to the Financial Intelligence Unit ('FIU') had to be filed without delay," the regulator said.
In addition, Fuchs failed to monitor ongoing business relationships. "Indeed, the name screening controls aiming at detecting persons subject to prohibitions and restrictive measures in financial matters had not been carried out for all clients of the trading desk, as their names were not included in the databases used to feed the name screening systems," the agency said. Screening tools were updated only "once a week" with no additional controls added, including after new EU and U.N. sanctions.
The financial regulator said Fuchs' "transaction monitoring" was "insufficient and even non-existent for the clients of the trading desk."