FATF greylist: Malta completes action plan, on-site visit to verify reforms

While still on the greylist, the FATF has determined that Malta has substantially completed its action plan, warranting an on-site visit to verify that reforms have begun

The Financial Action Task Force determined on Friday that Malta has substantially completed its action plan from June last year, warranting an on-site visit to verify that reforms have begun.

During its February 2022 plenary, the FATF determined that it will visit Malta to verify that the relevant anti-money laundering and terrorism-financing reforms have begun and are being sustained.

The FATF noted that Malta made a high-level political commitment to work with the FATF and MONEYVAL and strengthen its AML/CFT regime after being placed on its greylist.

It listed key reforms made by Malta since then, including demonstrating that beneficial ownership information is accurate, and that proper sanctions are applied to gatekeepers when they do not comply with obligations to obtain accurate and up-to-date beneficial ownership information.

The FATF added that Malta enhanced its use of the FIAU’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 FIAU

It also acknowledged that Malta increase its focus on financial intelligence analysis on to help law enforcement detect and investigate cases in line with local money laundering risks related to tax evasion.

Government has acknowledged the decision and said it is commited to improving its standards.

The Malta Chamber of Commerce, Enterprise and Industry welcomed news that the FATF February 2022 Plenary had made the initial determination that Malta has substantially completed its action plan and warrants an on-site visit.

“The Malta Chamber urges the relevant authorities and all private sector stakeholders to remain committed to the process so that Malta will exit the greylist in the coming months. The Malta Chamber will continue to facilitate dialogue and collaboration between all parties concerned so that systems and procedures are optimised, and high standards and good practices can be sustainably maintained. This is imperative for Malta's reputation as a financial jurisdiction to be restored.”

Malta became the first EU state to be placed on the FATF's so-called greylist of countries that need increased monitoring. 

The FATF's decision came despite Malta’s adherence to a Moneyval assessment in which it achieved a high compliance rate on various recommendations.

But the decision also came at the tail-end of years in which Malta’s Labour administration presided over a weakening of anti-money laundering rules: from the sale of citizeship to high net-worth individuals, criticised by the European Commission; to the harsh light on its Financial Intelligence Analysis Unit and inaction on the Panama Papers when the prime minister’s right-hand man was revealed to have set up a secret offshore firm, Malta was never too far off from international scrutiny.