A Luxembourg subsidiary of global insurance firm Allianz has been fined €283,000 by the country’s financial regulator for breaches of anti-money laundering laws.
Allianz Global Investors, which is part of the Allianz Group, was issued the fine in March 2022 following an on-site inspection four years previously, the Commission de Surveillance du Secteur Financier (CSSF) said in a statement published on its website on Friday.
The company had appealed against the sanction before Luxembourg’s Administrative Court, which upheld the financial regulator’s decision in a ruling in February, the CSSF said.
The inspection uncovered several breaches of compliance with anti-money laundering and terrorist financing rules, the CSSF said, including the firm’s risk analysis failing to adequately account for over 1,000 people who invested directly in the funds managed by the branch.
Deficiencies were also found in the company’s due diligence procedures for both investors and intermediary investors, the financial regulator concluded.
Allianz Global Investors had failed “to provide evidence of complete initial and ongoing documentation, including for the source of wealth” for an investor who was assessed as a politically exposed person (PEP).
At the time of approving this investor, the company had assessed the money laundering and terrorist financing risk to be “low”, the CSSF said, in breach of regulations.
Allianz Global Investors also failed to conduct name screening against PEP and financial sanctions lists for five investor accounts, and did not have an internal AML audit review cycle in place at the time of the inspection, and did not carry out such an audit in 2019 or 2020, despite CSSF requirements to the contrary.
The CSSF said it had considered the “type, gravity and duration” of the compliance breaches when setting the size of the fine, as well as the financial situation of the Luxembourg branch at the time of the on-site inspection as well as the firm’s “lack of reactivity” regarding the corrective measures to be implemented.
A spokesperson for Allianz Global Investors told the Luxembourg Times that the firm took remedial action in 2022 after the CSSF issued its findings and wishes to “highlight that the findings of the on-site inspection were documentational or procedural in nature and no case of money laundering took place.”
“Since this audit our internal and external auditors have not identified any material findings in the field of AML governance,” the spokesperson added.