Malta subjected to increased FATF monitoring

The Financial Action Task Force has today (25 June 2021) announced Malta’s inclusion on the list of jurisdictions under increased monitoring by reason of strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing, stating as follows:

In June 2021, Malta made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime.

Since the adoption of its MER in July 2019, Malta has made progress on a number of the MER’s recommended actions to improve its system, such as:

  • strengthening the risk-based approach to FI and DNFBP supervision;
  • improving the analytical process for financial intelligence;
  • resourcing the police and empowering prosecutors to investigate and charge complex money laundering in line with Malta’s risk profile;
  • introducing a national confiscation policy as well as passing a non-conviction based confiscation law;
  • raising sanctions available for the crime of TF and capability to investigate cross-border cash movements for potential TF activity; and
  • increasing outreach and immediate communication to reporting entities on targeted financial sanctions and improving the TF risk understanding of the NPO sector.

Malta will work to implement its FATF action plan by

  1. continuing to demonstrate that beneficial ownership information is accurate and that, where appropriate, effective, proportionate, and dissuasive sanctions, commensurate with the ML/TF risks, are applied to legal persons if information provided is found to be inaccurate; and ensuring that effective, proportionate, and dissuasive sanctions are applied to gatekeepers when they do not comply with their obligations to obtain accurate and up-to-date beneficial ownership information;
  2. enhancing the use of the FIU’s financial intelligence to support authorities pursuing criminal tax and related money laundering cases, including by clarifying the roles and responsibilities of the Commissioner for Revenue and the FIU; and
  3. increasing the focus of the FIU’s analysis on these types of offences, to produce intelligence that helps Maltese law enforcement detect and investigate cases in line with Malta’s identified ML risks related to tax evasion.

The Times of Malta report entitled “FATF lists three key issues Malta must fix to be taken off grey list” can be read here.

UPDATES:

1. An interesting article by Scott Longley for iGB entitled ‘Taskforce causes waves in Malta’ – commenting that whilst “many will have been relieved that the decision by the Financial Action Taskforce to place Malta on its grey list didn’t implicate the island’s gaming sector …… the medium-term implications of the move will be worrying for the bigger operators and suppliers” – can be read here.

2. On 17 June 2022, FATF announced that Malta was no longer under increased monitoring following ‘significant progress’ it had made in addressing the strategic AML/CFT deficiencies previously identified by FATF and included in its action plan. See our subsequent website posting entitled ‘FATF delivers good news for Malta but bad news for Gibraltar‘.