Malta’s Financial Intelligence Analysis Unit (FIAU) has delivered a regulatory fine to Trannel International Limited, a subsidiary of the Kindred Group, imposing an administrative penalty of €222,736.

Lapses in customer risk assessment

This penalty, stemming from an assessment conducted in October 2020, specifically targets Trannel’s deficiencies in customer risk assessments (CRA) and record keeping practices. The fine, however, remains subject to appeal before the courts in Malta.

Lack of documented CRA and inadequate methodology

The FIAU’s evaluation highlighted critical shortcomings in Trannel’s CRA processes, revealing a significant portion of customers surpassing the €2,000 deposit threshold lacked a risk rating. This lapse not only breached regulatory obligations but also hindered the establishment of proper customer due diligence levels and ongoing monitoring capabilities. Trannel responded proactively to the compliance examination, rectifying the deficiency by implementing an automated risk assessment model tied to account registration.

Furthermore, the FIAU identified inadequacies in Trannel’s CRA methodology, citing a lack of a system to link multiple accounts, an imbalanced focus on transaction risk, and insufficient consideration of customer and geographical risk pillars. Despite these flaws, the FIAU acknowledged Trannel’s commitment to rectifying the issues, with ongoing developments in a new CRA framework to address deficiencies.

Record keeping shortfalls

Trannel also fell short in fully complying with record-keeping obligations, with 70 percent of player profiles lacking the necessary documentation from open-source intelligence obtained from the internet. The FIAU highlighted two specific player profiles requiring stronger risk assessment:

1. Player Profile 2 (High Risk): Deposits of €3.5 million within 18 months, non-closed loop transactions, and discrepancies in declared income raised red flags. Trannel failed to scrutinize the player’s transactions adequately.
2. Player Profile 3 (Higher Risk): Deposits exceeding €350,000 in three months, questionable source of income, and third-party e-wallet transactions. Trannel neglected to gather essential information to substantiate the player’s financial activity.

While the FIAU’s penalty underscores the need for enhanced compliance, Trannel’s prompt corrective actions and commitment to a revised CRA framework signal a proactive approach to address regulatory concerns.

In conclusion, the imposition of a substantial penalty on Trannel sheds light on the critical importance of robust compliance in the iGaming industry.

The revelations from the FIAU’s assessment serve as a reminder for operators to prioritize meticulous customer risk assessments and adhere to stringent record-keeping practices to maintain regulatory integrity and safeguard against potential penalties.

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