Malta’s FIAU Imposes Fine on Trannel International for Compliance Failures

Malta’s Financial Intelligence Analysis Unit (FIAU) has slapped a hefty fine of €222,736 ($244,085) on Trannel International Limited, a subsidiary of the Kindred Group, for significant lapses in compliance with regulatory standards. 

FIAU Exposes Trannel’s Risk Analysis Shortcomings with Critical Compliance Deficiencies

The FIAU’s investigation revealed that Trannel had failed to conduct proper risk analyses for a substantial number of clients whose deposits exceeded €2,000, as mandated by law. Critical deficiencies in Trannel’s CRA methodology were identified, with a lack of a system to connect multiple customer accounts, reported Television Malta’s TVM News. Each account was assessed independently, disregarding the broader context of a customer’s overall activity.

In a proactive response to the compliance examination, Trannel rectified the deficiency by implementing an automated risk assessment model tied to account registration. Despite these corrective actions, the FIAU emphasized the gravity of the lapses in Trannel’s compliance measures.

The regulatory body highlighted instances where Trannel’s risk assessment heavily favored transaction risk over other crucial pillars such as customer and geographical risk. Inappropriately rated profiles accounted for 40% of the reviewed player profiles, neglecting factors like deposit amounts, transaction speed, and payment methods.

High-Value Player Profiles Unveil Trannel’s Inadequate Scrutiny of Financial Red Flags

Two specific player profiles drew attention due to Trannel’s failure to scrutinize transactions adequately. In one case, a player deposited €3.5 million ($3.8 million) within 18 months, engaging in non-closed loop transactions with discrepancies in declared income. 

The second case involved deposits exceeding €350,000 ($383,548) in three months, questionable income sources, and third-party e-wallet transactions. Trannel neglected to gather essential information to substantiate these players’ financial activities.

Furthermore, Trannel fell short in fulfilling record-keeping obligations, with 70% of player profiles lacking necessary documentation from open-source intelligence obtained from the internet. 

Malta is not the only jurisdiction where Trannel has been experiencing challenges. In June, Norwegian gambling authorities received legal affirmation as the Borgarting Court of Appeal rejected Trannel International Limited’s appeal against a compulsory fine of NOK 1.2 million ($108,600) per day. 

The legal dispute began in 2019 when Norway’s gambling regulator, Lotteritilsynet, urged Trannel to cease operations in the country, leading to rejected appeals, a suspension, and subsequent fines, with the recent court decision signaling the end of Trannel’s legal battles in Norway. 

Culture and Equality Minister Anette Trettebergstuen noted that the court’s ruling aligns with the Norwegian exclusive rights model, while Atle Hamar, director of Lotteritilsynet, anticipates Trannel’s complete withdrawal from the Norwegian market.