FATF verdict: Maltese say compliance on Monyeval recommendations cannot be ignored

Malta’s FATF greylisting verdict could rest on financial intelligence shortcomings, diplomats say

Photo: Hervé Cortinat/OECD
Photo: Hervé Cortinat/OECD

Maltese diplomats are engaged in last-minute arguments with counterparts to convince the Financial Action Task Force that it should not ignore the Council of Europe’s Moneyval assessment of the island’s anti-money laundering framework.

The Maltese fear a grey-listing from FATF of its financial jurisdiction emanates from two action points out of 58 recommended actions in which Malta appears to have made insufficient progress.

They want the EU and Moneyval to reject what they believe is an unfair yardstick for the island to be judged against.

Malta has argued it has been rated at least ‘largely compliant’ or ‘compliant’ by Moneyval on all recommendations, as well as on “immediate outcomes” (IOs) which are other grey-listed jurisdictions have not addressed.

Malta says there is consensus that Malta’s shortcomings is on IO6, and then only one of these outcomes seven recommended actions. But it says the COVID pandemic and the inability to demonstrate tangible progress through virtual meetings has hampered this score.

IO6 refers to the way financial intelligence and other relevant information are used by the competent authorities during money laundering and terrorist financing investigations.

In the 2019 Moneyval Evaluation Report, Malta achieved a moderate level of effectiveness in this area, but was told to undertake measures to strengthen its FIAU’s operations.

In total, Malta was given seven recommended actions with respect to IO6, which involved enhanced use of financial intelligence for tax-related offences, making better use of information generated from suspicious transaction reports, and enhancing human and technical resources, among other recommendations.

Malta says there is consensus that it has convincingly addressed other IOs, including those concerning whether legal entities can be misused for money laundering or terrorism financing purposes.

Malta will receive the final verdict on its potential greylisting on Wednesday.