Days before FATF verdict, MFSA publishes update on AML/CFT implementation

The Malta Financial Services Authority (MFSA) has published a status update on the implementation of its anti-money laundering (AML) and countering funding of terrorism (CFT) strategy document, highlighting "significant improvement" in resources and effectiveness. 

This update, published a mere two days before Malta willl receive its final FATF verdict, lists several changes made by the MFSA in order to strengthen its AML/CFT compliance framework.

Anthony Eddington, the MFSA's Head of Financial Crime Compliance, said that the authority has increased its AML/CFT full-scope examination capacity from 25 in 2019, to 81 in 2020.

"During these examinations, the MFSA checks the financial crime controls in place which seek to ensure that entities, such as banks and financial institutions, are not used for the purpose of laundering money or for the financing of terrorism," he explained.

Eddington added that if criminal activity is identified as a result of the institution's transaction monitoring processes, the MFSA verifies whether a suspicious transaction report has been made to the FIAU.

Christopher Buttigieg, the MFSA's ad interim CEO and Chief Officer Supervision, emphasised that significant investment in financial crime compliance is necessary and vital for the integrity of Malta's financial system.

"The MFSA's supervisory and onboarding processes has been our number one priority for the past two years. It is critical for the MFSA and its national counterparts to keep up with existing and emerging criminal threats and vulnerabilities."

Among the improvements flagged in the status update is the creation of a Financial Crime Compliance team, composed of 20 members of staff, tasked with performing AML/CFT supervision while acting as a source of expertise and data on AML/CFT risk within the MFSA.

A separate Due Diligence Function within the Enforcement Directorate was created, currently consisting of six fully-trained staff members charged with performing criminal probity and integrity checks on all legal and natural persons behind regulated entities, including directors and shareholders.

On Wednesday, Malta is set to receive a final verdict on how well it is tackling AML/CFT locally, with the FATF to decide on a potential grey-listing.

While Malta passed Moneyval, a precursor for the FATF evaluation, some countries are unconvinced by Malta's efforts in AML/CFT, and is pushing for a Malta greylisting.

READ ALSO: Malta pushed for grey-list despite higher compliance

Earlier on Monday, Finance Minister Clyde Caruana insisted that Malta will continue pushing for a positive result at FATF level by persuading relevant stakeholders that it has worked hard to undertake the relevant recommendations.

Caruana himself travelled to Germany last Thursday in a bid to convince members of the FATF not to greylist the country after having passed Moneyval in April.

He also said that irrespective of the result, Malta will continue to enact the necessary improvements in the sector.