Malta must use remedial period ‘wisely’ to up its game in fight against money laundering

Malta should ensure anti-money laundering enforcement action is “effective, fair and proportional”, financial services practitioners believe, after the country failed the Moneyval test.

The Institute of Financial Services Practitioners, an association of professionals in financial services, said Malta must “wisely” use the remedial period afforded by Moneyval.

The organisation was reacting to recent media reports that Malta had failed to reach a satisfactory level in a year-long review conducted in 2018 by international organisation Moneyval.

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The report was approved by the Council of Europe last week but has not been made public yet. Government has insisted it is still engaging with Moneyval in a post-adoption process but is committed to implement the recommendations. 

The IFSP said it was not privy to the Moneyval findings but insisted that if Malta is placed on the ‘enhanced follow-up status’, this would not be unprecedented.

“The situation Malta finds itself in is not without precedent and was perhaps not unexpected, but it is important that this remedial period is used wisely. It is also imperative that enforcement action is undertaken and maintained by the relevant authorities in a manner that is effective, fair and proportional,” the institute said.

It offered to work with the authorities to ensure that remedial action is undertaken “effectively, thoughtfully and in a timely manner to safeguard the integrity of the industry and Malta’s position as a credible and transparent financial services centre”.

It also appealed to the all financial services operators to ensure that the highest levels of scrutiny and vigilance are consistently applied in the course of their day-to-day activities.

The IFSP noted that Moneyval’s assessment was for the period 2013-2018 and excluded recent legislation and other initiatives that have already been enacted in anticipation of improvements that were necessary.

Other countries such as Hungary, Iceland and the Isle of Man, have also faced enhanced follow up procedures and remedial action plans in the past similar to what Malta could be facing now.