Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (“CSSF”), recently announced that it fined electronic money institution Alipay (Europe) Limited S.A. €214,000 ($250,000) for its alleged non-compliance with the Anti-Money Laundering/Counter Financing of Terrorism (“AML/CFT”) Act. According to the CSSF, the fine was imposed after an on-site inspection, conducted by the CSSF between June 26, 2023 and January 31, 2024, uncovered several deficiencies in Alipay’s AML/CFT compliance program. The alleged violations included 6 cases of suspected money laundering related to counterfeit goods that were not reported to Luxembourg’s Financial Intelligence Unit and inadequate transaction monitoring processes that caused alerts to be closed with substantial delays. The CSSF also reportedly found that customer identification documents were missing for certain Alipay clients and beneficial owners and that certain clients had submitted fake KYC documentation resulting in these clients not being duly identified and their identities not verified, as the AML/CFT Act required.
According to the administrative decision issued by the CSSF, the amount of the fine was based upon the legal and factual evidence gathered by CSSF investigators, including the gravity and duration of the breaches that existed at the time of the on-site inspection. The fine also reportedly reflected Alipay’s full cooperation with CSSF investigators and the corrective measures taken by the company after the AML/CFT breaches were identified.