Malta passes Moneyval test after wave of anti-money laundering operations

Malta appears to have passed its Moneyval test although a final verdict still awaits within the Financial Action Task Force, an international oversight body

The Moneyval report was approved in a closed plenary session of the Council of Europe
The Moneyval report was approved in a closed plenary session of the Council of Europe

Malta appears to have passed its Moneyval test after a series of reforms that beefed up the country's anti-money laundering regime.

On Thursday, the Council of Europe's anti-money laundering committee voted in favour of a final report on Malta's AML and terrorism-financing safeguards during a plenary session held in Strasbourg.

It is believed that the report commends Malta on its efforts to address financial crime shortcomings. However, the report will be held confidentially until it is officially published by Moneyval in summer. The decision is expected to be formally communicated in the coming days.

The Maltese government had received the conclusions from the Moneyval group to the draft Enhanced Follow-Up Report, a crucial document for the future of Malta’s banking and financial services industry.

Malta had initially failed a first assessment from Moneyval in 2019, after which the government was given a year to patch up any legislative gaps in terms of money laundering and terrorist-financing.

Last month, Robert Abela warned the financial services sector that Malta is in a crucial stage relating to the Moneyval assessment, with two or three months left of hard work to ensure Malta avoids being grey-listed.

Malta still faces a final verdict by the Financial Action Task Force (FATF) in June, to avoid being put on a financial grey-list. However, passing the Moneyval test would be a major step forward.

Reforms within the police force over the past 12 months have seen the creation of a more robust financial crimes unit that has led to high profile prosecutions on money laundering and other financial crimes.

This was an important development since one of the major complaints flagged by Moneyval was a lack of prosecutions by the police despite red flags noted by regulatory agencies like the Financial Intelligence Analysis Unit and the Malta Financial Services Authority.

The FIAU and the MFSA have also undergone transformation with more resources being directed towards their way.

Business chambers welcome Moneyval result

News of the Moneyval result was welcomed by the Chamber of SMEs. “A positive outcome such as this one is documented proof that Malta has turned the page,” the Chamber said, adding a negative opinion would have led to catastrophic consequences.

“Whilst scrutiny will continue and so will Malta's efforts to keep up progress, the positive position of Moneyval in relation to Malta's report goes a long way in addressing the serious shortcoming our country has lived through in the recent past,” the chamber said.

It congratulated the Prime Minister and the Finance Minister for this achievement.

The Malta Chamber of Commerce, Enterprise and Industry said it was pleased to see that the Council of Europe’s anti-money laundering expert committee has voted in favour of approving a final report on Malta.

Whilst welcoming this news, it said it was imperative to ensure continued observance of the anti-money laundering measures whilst ensuring the processes adopted do not impose disproportionate bureaucratic burdens on the financial services industry.

“The Malta Chamber stresses that success can only be achieved through a unified approach, and all efforts need to be focused on maintaining the highest of standards through constant proactive action and keeping transparency at the forefront.”