FIAU defends choice of senior associate

By means of a Right of Reply (RoR), the Financial Intelligence Analysis Unit (FIAU) has made a number of points to explain its choice of Kristina Arbociute, a former employee of Exante (XNT), to join its ranks, following an article by The Shift titled ‘XNT (Exante) and FIAU cuddling up, really‘ that questioned the move based on her former employer’s track record in the sector.

As, in our view, the RoR did not qualify under the law as a proper RoR, because it did not restrict itself to addressing facts, we have extracted the relevant points and are referring to them in this article, together with our response.

Saying the article contained “factual errors,” the FIAU said it is normal that its employees come from the private sector. We do not contest that basic principle – it is her closeness with the company that she formerly worked for and its top officials that raise questions about the circumstances of this particular case.

The FIAU said: “Regarding the comment on Arbociute’s move from the private sector, the FIAU remarks that the majority of its employees join the Unit from entities within the private sector; knowledge and experience on the operations of regulated entities is an asset to any financial supervisor and is, in most cases, a prerequisite for the role.”

It is our belief that while experience in the sector is a critical ingredient for recruitment to a government agency, it is precisely because the FIAU’s function itself is so critical – especially at a time when there are concerns about a possible greylisting by Moneyval – that attention should be paid to ensuring a high level of propriety.

Exante (XNT) has a track record that is highly questionable. The culture from which experience is gained, and any recruit’s high profile association with people whose names keep coming to our attention in various contexts, should always be a matter of concern.

The FIAU also said that Senior Associates and other employees within the FIAU’s Supervision section do not have access rights to analytical cases (investigation files), which are the remit of the FIAU’s Intelligence Analysis section.

“The FIAU maintains strict conflict of interest policies and can confirm that since joining the FIAU, the employee in question has never been involved in any manner whatsoever in any supervisory work concerning her former employer.”

The Shift’s article did not state that Arbociute was involved in any supervisory work on Exante (XNT).

The FIAU also said, “all enforcement decisions are taken by the FIAU’s Compliance Monitoring Committee that is governed by policies and procedures which ensure that the highest regulatory standards and best practices are observed and that no one person can single-handedly steer or overturn the discussions of the Committee.”

While The Shift is not contesting the FIAU’s procedures, we must say that we feel that the Agency is being disingenuous. Arbociute has access to sensitive information that may eventually lead to decisions and enforcement actions on competitors of Exante (XNT).

We believe that it is pertinent to note that, to the best of our knowledge, the FIAU has so far never taken any enforcement action against Exante (XNT).

The FIAU has expressed its “disappointment” at the article. The Shift hopes that this disappointment will translate into the FIAU being sensitised to the harm caused to its reputation, partly because of the way people are chosen from the sectors it regulates.

We would be lacking if we were to fail to express our earnest desire to see the FIAU repair the harm being done to its reputation.   Many of the causes for this should not be laid at the door of the people trying to do their job but rather at the door of certain decision takers, be they decisions on who to investigate, or who to hire or fire.  Former FIAU investigator Jonathan Ferris’ name springs to mind in the context of the latter.