[WATCH] Malta expected to spend 2022 under FATF greylist

Fight against tax evasion targets foreign entities using Malta as layer in elaborate structures to evade tax

Photo: Hervé Cortinat/OECD
Photo: Hervé Cortinat/OECD

Malta must complete its check-list to satisfy FATF requirements with a “100% score” before it emerges from the greylist, FIAU director Kenneth Farrugia has said.

Interviewed on TVM’s Xtra, the Financial Intelligence Analysis Unit director said Malta would manage to satisfy the requirements for its exit from the greylist, but projected anything up to 18 months before Malta is white-listed again.

“The country that occupied the least time on the greylist spent 18 months. So for Malta it’s either that time period or a shorter one… we’ve been working on our plan all summer.

“We need to be proactive and encourage the sectors we monitor, to grow, by investing in private-public partnership; we want to fight money laundering and terrorist financing together with the sector,” Farrugia said.

One of the chief demands from the FATF is that the FIAU assists the police on tax evasion cases, and that there is more enforcement on tax evasion cases.

“Malta has to address serious tax evasion cases; not petty cases. Our action plan is to strengthen the fight against serious evasion. We have strengthened our risk assessment framework on how to investigate these cases, for example the structures employed by foreign subjects who remit their money here to evade their taxes,” Farrugia said.

Farrugia said this kind of assessment was being carried out on tax evaders both from the EU and non-EU countries.

“We must make a difference between tax planning and tax evasion: our objective is not people who are getting rebates on their taxable dividends here, and who still end up paying tax on the dividends back home. Our targets are entities that are inflating their revenues, hiding the source of their income, hiding the ultimate beneficial owner, or using Malta as one part of the layering process.”

Farrugia also said the unit’s other top priority is the financing of terrorism. “We’ve also had suspicious transaction reports related to terrorism,” Farrugia said. “Our cooperation with our FIU counterparts is excellent and this is a top priority: in such case we’re not even talking about millions, but sums of €600 or €700. And work on such cases becomes round-the-clock.”

Farrugia said Malta could boast of a strong regulatory framework for cryptocurrency, but disagreed with notions that Malta’s stricter anti-money laundering regime meant the end of Malta’s flirtation with crypto. “We’re not here to kill business, but we’re trying to attract quality operators, not rogue ones,” Farrugia said.