Rigorous checks saw MFSA refuse a quarter of applications in first half of 2019

Malta Financial Services Authority says Moneyval recommendations already implemented or a work in progress

The MFSA says it has strengthened the quality and increased the quantity of supervisions
The MFSA says it has strengthened the quality and increased the quantity of supervisions

The financial services regulator has refused a quarter of all licence applications that came before it in the first half of 2019 as a result of more rigorous checks.

The Malta Financial Services Authority said the number of applications that were refused increased to 25% from 10% that were pushed back in 2017.

The authority was reacting to the Moneyval report that was released this week.

The MFSA said that most of the recommendations made by the Council of Europe’s body of experts have already been implemented or are a work in progress.

The authority was the second to react to the Moneyval report that flagged problems with the way the country dealt with money laundering supervision and prosecution.

Earlier, the Financial Intelligence Analysis Unit said it had implemented 90% of Moneyval’s recommendations.

The Moneyval report has a cut-off date of November 2018 and does not take into account any developments since then.

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

The MFSA said that over the past 12 months it established a dedicated financial crime compliance unit to better reflect the importance of AML/CFT supervision in the MFSA’s prudential and conduct oversight.

The setup was strengthened further through the engagement of a team of American experts that are also training their Maltese counterparts.

“The additional resources have resulted in a substantial increase in the number of inspections carried out… but the MFSA has also introduced more in-depth and extensive AML/CFT checks throughout the supervisory lifecycle process,” the statement said.

The MFSA said it has increased the number of supervisory visits for anti-money laundering purposes in close collaboration with the FIAU.

It added that the authorisation process had also been made more stringent, with a focus on the shareholding structure, governance framework, internal controls and business models presented.

The MFSA said it addressed the recommendations in the Moneyval report, relating to the Register of Trust Ultimate Beneficiary Owners. This included the setting up of a register of beneficial owners of trusts which will be extended to all trusts by 1 January 2020.

MFSA CEO, Joseph Cuschieri said: “Money laundering is a significant challenge for regulatory authorities worldwide. Through our stronger interactions with foreign regulators and investment in our technical capacity and resources, we are achieving a better understanding on how corporate structures can be exploited for money laundering purposes. We will not be complacent - our commitment is to raise the bar in AML/CFT supervisory standards so that the MFSA can be a role model for financial crime compliance standards in Europe.”

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