FIAU board not aware of intelligence work carried out

The governors of the Financial Intelligence Analysis Unit (FIAU), which includes the Attorney General as chairman, has said a call for the publication of confidential FIAU reports was “leading to a misguided expectation for action which neither the FIAU as an intelligence agency, nor the chairman and other board members are able to take legally and in practice.”

Article 18 of the Prevention of Money Laundering Act provides that the FIAU shall consist of a board and a director, who is entrusted to carry out the policy laid down by the board.

The FIAU said that ever since 2002, this legal provision was strictly interpreted and implemented such that there is a clear and distinct separation between the policy direction and oversight of the Board, and the operational activities conducted by the Director and his staff.

“Accordingly, the Board does not involve itself in the operational activities of the FIAU. The Board is not provided with, it does not have access to, nor does it seek to obtain any information or documentation that the FIAU is in possession of in the exercise of its intelligence, analytical, and compliance supervision functions.

“Operational information in the possession of the FIAU has always been considered as secret and confidential, and the Board does not require access to it in order to carry out its responsibility as established by the Prevention of Money Laundering Act,” the FIAU said – insisting that the board is never aware of suspicious transaction reports received by the FIAU or of their contents.

“The Board is not provided with, nor does it seek to, obtain case specific information on the intelligence work carried out by the FIAU, and is never aware of any information received or collected by the FIAU in its analytical and compliance work.

“The Board is not informed when reports or any other disclosures are transmitted by the FIAU to the Police. These reports are not provided or otherwise made available to the Board, they are not approved by the Board, nor is the Board privy to their contents.”

Similarly, compliance supervision reports sent by the FIAU to subject persons following on-site inspections are not provided or otherwise made available to the Board, and do not require the approval of the Board, nor is the Board privy to their contents.

“These reports are also never published and at the stage when they are issued, they only address the relationship between the FIAU in its supervisory functions and the subject person concerned. The separation between the Board and the operational function of the FIAU has always been maintained throughout the years, and is considered indispensable for the proper functioning of the FIAU as an intelligence agency and to ensure that the Director and his staff are able to operate within the strictest confidentiality and without any unnecessary interference,” the FIAU said.

The FIAU also said it had carried out work in connection with the revelations of the Panama Papers and the involvement of Maltese persons and companies. “That work is still being pursued. The Board confirms that it had been informed in generic terms by the director of the FIAU about the said work.

“However, in line with the separation between the function of the Board and that of the Director, the Board was never provided with specific information on the intelligence work that was being carried out, nor with copies of reports transmitted to the Police.”

The board said it is not aware of the contents of these reports. “Neither the Chairman nor any other member of the Board has ever read or has ever been in possession of any copy of these reports, nor does the Board have access to them.”

It added that the Prevention of Money Laundering Act does not give to the FIAU, (whether to the Chairman or other members of the Board or to the Director), any power to take any further action or to conduct criminal investigations or to instruct the Police in this respect.

“The Board of the FIAU is bound by the strictest form of secrecy and confidentiality. Article 33 of the Prevention of Money Laundering Act expressly provides that any official or employee of the FIAU who discloses that an analysis is being carried out, or that information has been transmitted to the FIAU, or that information has been transmitted to the police for investigation, shall be guilty of an offence and liable on conviction to a fine or imprisonment.”

The members of the Board are appointed by the Minister for Finance, and are nominated by the Attorney General, the Chairman of the Malta Financial Services Authority, the Governor of the Central Bank, and the Commissioner of Police. Two members of the Board are appointed as Chairman and Deputy Chairman by the Prime Minister. The current Chairman is the Attorney General, and his predecessor prior to 2010 was also the Attorney General.