Hypo Vorarlberg is to pay a fine of 791,000 euros for violating its duty of care to prevent money laundering and terrorist financing. The FMA announced this on Friday.
Specifically, it was about failures in connection with a correspondent bank, it said. The relationship with the correspondent bank included both the implementation of trust investments and the execution of payments. Hypo Vorarlberg had not obtained sufficient information and evidence about the origin of the funds invested in the investment accounts, the FMA complained. Furthermore, the payment accounts were not subject to risk-based continuous monitoring.
Bank wants to appoint
In a statement to the APA, Hypo Vorarlberg stressed that the FMA’s accusation only relates to the appropriateness of audit procedures. No criminal offenses relating to money laundering or terrorist financing were identified.
Hypo Vorarlberg intends to appeal against the fine at the Federal Administrative Court: It rejects the supervisory authority’s allegations. The correspondent bank is a financial institution from the European Economic Area that has to comply with the same rules as an Austrian bank for both trust and payment accounts.
On this basis, Hypo Vorarlberg carried out its ongoing audit of compliance with the duty of care to prevent money laundering and terrorist financing. This involved four accounts with a total investment volume of 1.2 million euros. The management board of Hypo Vorarlberg is of the opinion that all legally required measures were adequately complied with. In addition, the business relationship with the correspondent bank was terminated in 2019 – one year before the FMA audit.