[WATCH] FATF presidency warns: Malta must not downplay seriousness of financial crime

FATF greylist | Malta needs to ensure financial intelligence is focussed on tax evasion and money laundering, increase transparency and accuracy of beneficial ownership register and ensure clearer roles for FIAU and Tax Commissioner

Malta was placed on the greylist by the FATF
Malta was placed on the greylist by the FATF

Updated at 3:25pm with additional comments from FATF chief

Malta has pledged to focus its financial intelligence capabilities on tax evasion and money laundering in a commitment to the Financial Action Task Force.

The Financial Intelligence Analysis Unit’s analysis has to increasingly focus on criminal tax and money laundering cases in such a way that produces intelligence that “helps Maltese law enforcement detect and investigate cases in line with Malta’s identified money laundering risks related to tax evasion”.

The commitment forms part of the FATF action plan that Malta agreed to implement in the wake of its greylisting.

The information comes from summary conclusions of the FATF fourth plenary meeting under the German presidency of Marcus Pleyer.

“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,” Pleyer said at a press conference on Friday.

He warned that Malta "must not downplay the seriousness of the matters at hand", insisting that the FATF's decision to greylist the country was based on the lack of "effective implementation" of anti-money laundering and tax evasion laws.

"There are serious weaknesses that need to be addressed to combat money laundering," Pleyer said. "I have followed the news and I can see that people are not happy but government has given a clear political commitment to address the issues... in the long run having strong rule of law and effective anti-money laundering regimes will contribute to sustainable growth and a level playing field."

Asked to explain the difference between the Moneyval assessment that Malta passed and FATF's decision, Pleyer said that FATF did not only look at technical and legal complaince but also how the rules are implemented on the ground.

He would not say what timetable Malta has agreed to with FATF to implement the necessary changes, insisting that was a confidential matter.

However, he played down the impact of the cryptocurrency sector on the FATF's decision, insisting this was not an issue in the Malta evaluation. "FATF introduced new standards for virtual assets in 2019 after the Malta evaluation and we will be shortly issuing guidelines to countries on how to implement these standards," Pleyer said.

Other key issues identified by the FATF as weaknesses were the lack of transparency in the register of beneficial ownership.

Malta has pledged to ensure that information on beneficial ownership is accurate and effective sanctions are applied on professionals who fail to comply with reporting obligations.

Another commitment is to clarify the roles and responsibilities of the Tax Commissioner and the FIAU.

FATF recognised Malta’s progress on several fronts since 2019, including resourcing the police and empowering prosecutors to investigate and charge complex money laundering cases, introducing a national confiscation policy as well as passing a non-conviction based confiscation law.

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