Malta needs bigger institution to deal with large scale money laundering, Finance Minister says

Government looking at possible institutional arrangements to address money laundering at a large scale carried out in banks once detected by the MFSA and FIAU, Edward Scicluna tells delegates at a FinanceMalta conference

Finance Minister Edward Scicluna speaking at FinanceMalta's 12th annual conference on Thursday
Finance Minister Edward Scicluna speaking at FinanceMalta's 12th annual conference on Thursday

An large scale institution in Malta is needed to address large scale money laundering once this is detected by the Malta Financial Service Authority and the Financial Service Analysis Unit, Finance Minister Edward Scicluna said.

Scicluna said that while there were a number of institutions in Malta which were working together against money laundering, the country need a “much bigger institution” to deal with organised money laundering at a large scale which is detected by the Malta Financial Services Analysis Unit and the Financial Intelligence Analysis Unit

The minister was speaking at FinanceMalta’s annual general conference on Thursday.

He said that the government was currently looking at various possible institutional setups in this regard.

“We are looking at institutional arrangements to address organised money laundering at a large scale which is carried out in banks and discovered by the MFSA or FIAU. We will need to have a much bigger institution than present to deal with the issue,” he underscored.

Scicluna highlights that no country which has a significant number of banks and financial services can claim that no money laundering is happening or will happen in its jurisdiction.

“The point is what one does about it, which is why we have people on the ground to deal with this,” Scicluna said.

He said that, locally, the MFSA, the FIAU, the prosecutor’s office and the Asset Recover Bureau all worked together to deal with money laundering.

Unlike some other European countries, such as Germany, Malta was also in favour of an EU-wide institution to deal with anti-money laundering activities, Scicluna added.

“We don’t have an EU institution which oversees anti-money laundering efforts. While Germany is against such an institution, Malta is in favour of it,” he said.

Financial crime on the rise

While most forms of crime in Malta had registered a decline in the past years, when it comes to financial and cyber crime, this was on the rise, economic crimes unit head Ian Joseph Abdilla said.

Abdilla was participating at a panel discussion during the conference, in which MEPs Alfred Sant and Roberta Metsola and FIAU director Kenneth Farrugia also participated.

In light of the increase in financial crime, the economic crimes unit had significantly beefed up its resources, and the results were now being felt, Abdilla said.

“ The police are taking the necessary steps to beef up its resources in these two areas. Financial crime isn’t only money laundering and crypto currency. The police deal with a variety of crimes, such as large-scale fraud and misappropriation, anything that has to do with hacking or cyber attacks, internet fraud,” he said

He said his unit would be increasing its staff contingent from the 36 in 2018 to 100 members by 2020, including through the employment of civilians.

“The results are showing. The work done in this year alone is more than what was carried out in the previous five years,” Abdilla added.

FIAU bolstered

When it came to the FIAU, Farrugia said that, following the review it was subjected to from the European Banking Authority due to the Pilatus Bank case, the Unit had taken on board the EBA’s recommendations, updated its action plan accordingly, and subsequently started implementing it.

It then started holding six-weekly meeting with the EBA and European Commission, and, by March 2019, had implemented all the recommendations except for those which are ongoing in nature.

“We’re not there yet, there’s room for improvement,” Farrugia said.

On her part, Metsola underlined the importance on safeguarding Malta’s reputation when it came to the scrutiny from the EU the country was subjected to when it comes to financial crime.

Sant said that Malta had had some problems in catching up with the unprecedented economic growth when it came to combatting financial crime.

However, he noted, this issue had been addressed.