Editor’s Note
This article reports on a regulatory fine imposed on Alipay’s European entity for breaches of anti-money laundering rules. It serves as a reminder of the stringent compliance standards financial institutions face in cross-border operations.
Recently, the Luxembourg Financial Sector Supervisory Commission (CSSF) has imposed an administrative fine of €214,000 (approximately 1.78 million RMB) on Alipay (Europe) S.à r.l. (referred to as “Alipay”) for significant breaches of anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. The CSSF determined that Alipay violated relevant rules, including Luxembourg’s Law on the Fight against Money Laundering and Terrorist Financing.
The CSSF’s penalty addresses four specific violations by Alipay:
- Failure to promptly report six suspicious transactions related to counterfeit goods to the financial intelligence unit.
- Delayed handling of multiple risk alerts, resulting in a failure to implement restrictive measures in a timely manner.
- Incomplete customer identity verification, particularly for remote account openings lacking face-to-face confirmation and proper Know Your Customer (KYC) documentation.
- Ineffective outsourced compliance monitoring mechanisms, where the second line of defense failed to conduct regular supervision and effectiveness reviews.