Financial Crime World

Banking Regulations Toughen Up to Combat Financial Crime in Malta

In a bid to combat financial crime, including money laundering (ML) and terrorist financing (TF), the Maltese government has stepped up its regulatory efforts. The country’s National Risk Assessment identified local criminal groups, drug trafficking, and tax evasion as the primary sources of illegal proceeds, with sectors such as banking and corporate service providers posing higher risks.

Regulatory Efforts

As part of this effort, Malta transposed the 4th Anti-Money Laundering Directive (4AMLD) into national law in 2018, while the 5th Anti-Money Laundering Directive (5AMLD) is being implemented. The EU Commission has also proposed a package of legislative changes to further strengthen anti-money laundering and combating the funding of terrorism (AML/CFT) rules.

Proposed Changes

One key proposal is the establishment of an EU AML Authority (AMLA), which will oversee national authorities and ensure consistent application of EU regulations. AMLA is expected to become operational by 2024, providing support to financial intelligence units and law enforcement agencies in their efforts to combat ML/TF.

Consequences of Non-Compliance

Failure to maintain effective AML/CFT systems can have severe consequences, including:

  • Unwitting support of criminal or terrorist entities
  • Regulatory intervention resulting in substantial penalties
  • Reputational damage

Importance of Compliance Culture

An organisation’s culture of compliance is critical in preventing such shortcomings and identifying issues before they become a concern. Management buy-in and involvement are essential to develop a strong AML culture.

KPMG Assistance

KPMG, with its extensive experience in assisting subject persons, can help organisations turn compliance into a competitive edge by implementing robust, real-world solutions that meet regulatory expectations. The company’s team is focused on providing pragmatic frameworks that work within an organisation’s business model, ensuring that AML/CFT controls are integrated and effective.

Benefits of Working with KPMG

By working with KPMG, organisations in Malta can:

  • Navigate the complexities of AML/CFT regulations
  • Mitigate ML/TF risks
  • Achieve greater program agility, effectiveness, efficiency, sustainability, and integration