FIAU seeks higher penalties for practitioners in breach of anti-money laundering rules

The Financial Intelligence Analysis Unit has implemented 90% of the recommendations made by Moneyval in a critical report on Malta’s fight against money laundering and financing of terrorism

The FIAU has been implementing most of the recommendations made by Moneyval
The FIAU has been implementing most of the recommendations made by Moneyval

Penalties imposed on practitioners by the anti-money laundering regulator should be made public irrespective of the appeals process, the agency’s director said. 

Kenneth Farrugia said the Financial Intelligence Analysis Unit is recommending a change in the law that currently does not allow the immediate publication of names.

“The FIAU cannot publish penalties levied against practitioners pending the outcome of the appeal process but the agency has proposed legal changes to this effect, which we hope will make our sanctioning more effective,” Farrugia said.

Fines will also increase, he added, and practitioners found to be in breach will be required to take remedial action based on deadlines.

He was speaking at a media briefing in the wake of the Moneyval report released on Thursday that found several shortcomings in Malta’s preparedness and ability to combat and prosecute crimes related to money laundering and terrorism financing.

READ ALSO: Moneyval: Malta must step up investigation and prosecution of money laundering

The FIAU was one of several agencies covered by the Moneyval assessment that had as its cut-off date, November 2018.

Moneyval also made several recommendations in the report.

Farrugia said 90% of the Moneyval recommendations to strengthen anti-money laundering and terrorism financing supervision and enforcement were fully implemented by the FIAU by March 2019.

“The FIAU had been working on an action plan agreed with the European Banking Authority and the European Commission last year, which addressed the bulk of the recommendations made by Moneyval,” he said.

Malta was found to have been below par in three particular aspects: supervision, investigation and prosecution, and confiscation of assets obtained from criminal proceeds.

While the supervision aspect falls within the FIAU’s remit, prosecution is a police matter and the confiscation of assets is the responsibility of another agency.

Farrugia said his agency’s supervisory role has been bolstered over the past 12 months, a fact also acknowledged by Moneyval.

The agency has introduced an automated system called Caspar to process information and provide a risk score for practitioners based on the information available to the FIAU.

“In this way, we will adopt a new risk-based supervisory approach that will see entities deemed to be of higher risk being examined once every 18 months,” Farrugia said.

The FIAU has also increased its staffing levels to become more effective. From around 38 employees in 2017, the agency now employs 58 people, with the number expected to grow to 138 in the coming years.

“The FIAU values the independent and technical Moneyval assessment… We appreciate the positive outcomes of this report and take heed of all recommendations,” Farrugia added.

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