Malta passes Moneyval test after ‘significant progress’ in anti-money laundering fight

Malta has passed the Moneyval test, registering “significant progress” in its fight against money laundering and terrorist financing, the Council of Europe body said.

The report concludes that Malta has upped its level of compliance with the Financial Action Task Force (FATF) standards and no longer has ‘non-compliant’ or ‘partially compliant’ ratings. The follow-up report was published today.

“Malta has achieved full compliance with 12 of the 40 FATF recommendations constituting the international AML/CFT standard. Malta retains minor deficiencies in the implementation of another 28 recommendations where it has been found ‘largely compliant’. Malta no longer has ‘non-compliant’ or ‘partially compliant’ ratings,” the report said.

The analysis also covered implementation of new international requirements for virtual assets, which cover among others the most prominent virtual currencies and the providers of these assets.

“Malta was among the first Moneyval countries to implement the regulatory and institutional framework and conduct assessment of ML/TF risks in this area. Malta’s rating on the implementation of this recommendation has been upgraded from ‘partially compliant’ to ‘largely compliant’,” Moneyval said.

As a result, Malta has succeeded to meet general expectation for countries to have addressed most if not all of the technical compliance deficiencies after the adoption of the mutual evaluation report, within two years.

The government undertook several key reforms in the wake of the Moneyval report from two years ago, including beefing up the regulatory authorities, introducing new laws and strengthening the police force arm responsible for investigating financial crimes.

As a result of an assessment in 2019, Malta was requested to report to Moneyval under the enhanced follow-up procedure. The country risked grey-listing unless it upped its game.

Deficiencies with technical compliance were identified with respect to application of some of the preventative measures, transparency of legal entities, supervision and international co-operation.

Moneyval has examined a range of legislative, regulatory and institutional measures implemented by Malta to address these deficiencies.

The positive steps by the authorities prompted Moneyval to assign Malta higher international compliance ratings in several areas.
The follow-up report studies the legislative, regulatory and institutional reforms, and does not assess the degree to which the implemented reforms have been effectively implemented.

On the basis of its findings, Moneyval decided that Malta will remain in enhanced follow-up and will report back to the organisation on further progress to strengthen its implementation of AML/CFT measures in two years.

The report will now require clearance at a meeting of FATF in the coming weeks.