Luxembourg’s financial regulator has fined Rakuten Europe Bank €185,000 for multiple breaches of anti-money laundering and counterterrorist financing (AML/CTF) regulations, according to a new report by the Luxembourg Times.
The Commission de Surveillance du Secteur Financier (CSSF) levied the penalty on May 19th of last year, but it was made public Tuesday in a statement posted on the regulator’s website, the newspaper said. The fine amounts to about 1% of the bank’s annual turnover as of the end of 2022, according to the CSSF statement cited in the report.
The enforcement action follows an onsite examination conducted between February and November 2023, which reviewed Rakuten Europe Bank’s AML/CFT framework and the remedial steps it took after shortcomings previously identified by “another European national competent authority,” according to the report.
CSSF examiners cited outdated monitoring scenarios that did not cover all transactions and could not be properly configured after staff departures in IT and compliance roles. The bank was also using a version of its monitoring tool that was no longer supported by the supplier, the news outlet said.
The regulator noted that similar issues had been flagged in 2019 and 2020 by another European supervisory authority, but the CSSF found the corrective measures still had not been fully implemented four years later, pointing to delays in replacing the monitoring system and insufficient interim controls, the Luxembourg Timesreported.
The CSSF also identified significant delays in handling alerts produced by the bank’s monitoring tools. Approximately 9% of alerts were closed more than two months after they were created, the regulator said, and thousands of customer-screening alerts remained unreviewed during the examination, according to the report.
The bank separately submitted several suspicious activity reports to Luxembourg’s Financial Intelligence Unit weeks later than required, despite identifying potential indicators in dozens of customer files. In one case involving a customer previously subject to asset freezes in France for terrorism-related reasons, the bank did not file a suspicious activity report at all, the news agency said.
Read more at the Luxembourg Times