Regulation

Malta edges closer to exiting grey list as FATF plots visit to assess AML action plan

By Conor Mulheir - 7 Mar, 2022

The Financial Action Task Force (FATF) will visit Malta at the earliest possible opportunity to confirm whether the country has substantially completed the action plan set out for it last year.

The FATF added Malta to its so-called ‘grey list’ of countries under heightened scrutiny last June after identifying deficiencies in the country’s anti-money laundering and funding of terrorism (AML/CFT) framework.

FATF president Marcus Pleyer said that a lack of transparency on the ultimate beneficial owners of companies and weak financial intelligence on tax crimes were the main strategic deficiencies that led to Malta’s inclusion on the list.

It marked the first time an EU member state had been included on the list and was followed in October with an agreed action plan drawn up by the Malta National Coordination Committee.

Actions to improve the system included strengthening Malta’s risk-based approach to the supervision of finance institutions and non-financial businesses, improving its analytical process for financial intelligence, improving police resources and prosecutor powers for investigating and charging financial offences and raising the sanctions available for the crime of terrorist financing.

Since then, FATF said it had determined in its February plenary that Malta has substantially completed its action plan and now warrants an on-site visit to verify that its implementation of reforms has begun and is being sustained, and that the necessary political commitment remains in place.

The FATF Plenary is taking place this week in Paris with important items on the agenda such as a reform of the beneficial ownership transparency, the conclusion of the strategic review, work on enabling countries to rapidly freeze assets and addressing unintended consequences. pic.twitter.com/OXzc2h2q3B

— Marcus Pleyer (@MarcusPleyer) March 3, 2022

Key reforms made so far include continuing to demonstrate that beneficial ownership information is accurate and that effective, proportionate and dissuasive sanctions are applied to legal persons where information is found to be inaccurate.

Malta has also enhanced its use of intelligence from the Financial Intelligence Unit (FIU) to support authorities pursuing criminal tax and money laundering-related cases, and increased its focus of the FIU’s analysis on money laundering and terrorist financing offences in order to help the authorities detect and identify cases more effectively.

There was concern among gambling industry stakeholders that Malta’s inclusion on the grey list would see international operators take their business elsewhere in fear of possible ramifications for the island’s booming iGaming industry.

Kindred Group CEO Henrik Tjärnström was one of several executives to comment on the situation. At the time, he said Malta needed to move fast to redeem its reputation and lose its status on the FATF list.