FIAU unveils three-year strategy to target financial crime

Only 20% of foreign-owned companies hold a local bank account, FIAU seminar on new three-year strategy hears

Only 20% of foreign-owned companies in Malta hold a local bank account, making it harder for the authorities to investigate these entities, a top FIAU official said.

The example was used to highlight the need for the Financial Intelligence Analysis Unit (FIAU) to adopt a new three-year strategy, which was unveiled on Monday.

Alex Mangion, head of strategy at the FIAU, said the initial vision ignored the fact that anti-money laundering efforts were being carried out with local and foreign counterparts.

It had been overly-focused on the FIAU without mentioning other issues that influence and impact the local financial system, he explained.

Part of this strategy renewal involved the unit developing a new vision and purpose to safeguard Malta’s financial system from criminal abuse.

Mangion added that there are several issues that impact the private sector and business community, but also the investigative communities.

Citing another example, he said that over 300,000 people in Malta have a Revolut account, which is not as accessible for investigation purposes as accounts held in domestic banks.

The FIAU’s priorities include strengthening its risk monitoring system so that the unit is up-to-date on how business sectors and subject persons are vulnerable to different risks.

Mangion said that if drug trafficking, corruption and tax evasion are some of the main threats in Malta, the FIAU needs to be able to know which sectors are most vulnerable to these threats and which subject persons are at risk.

The FIAU is also planning to make more enhanced use of public-private partnerships and intends to publish methodology data that led to certain enforcement decisions.

Apart from this, the FIAU is aiming to introduce automation measures to speed up certain processes, including the review of suspicious transaction reports.

When fielding questions from the audience, FIAU Director Kenneth Farrugia said that the unit will explore a possible merge of the FIAU’s Risk Evaluation Questionnaire (REQ) and the MFSA’s Annual Compliance Return (ACR), two reports which include a lot of overlap.

He added that the FIAU needs to embark on a training and outreach programme for credit institutions in particular on how to implement certain obligations when it comes to high-risk and low-risk clients.

Farrugia pointed out that when the same control is used on all clients, banks and other entities end up wasting efforts on low-risk areas.