Financial Crime World

Strengthening Financial Crime Prevention with Internal Controls in Malta

As the Moneyval report on September 12, 2019 approaches, the Malta Financial Services Authority (MFSA) has embarked on a significant overhaul of its Anti-Money Laundering (AML) standards and procedures. This move comes after extensive consultation with local and international institutions.

Enhancing AML/CFT Supervision

Over the past year, the MFSA has taken concrete steps to bolster its AML/CFT supervision by integrating it as a key element of supervision throughout the entire supervisory cycle of an entity’s relationship with the Authority.

Notable Initiatives

  • Financial Crime Compliance (FCC) function: The FCC function underscores the strategic importance of AML/CT supervision.
  • Collaboration with Malta Financial Intelligence Analysis Unit (FIAU): Strengthening collaboration to enhance the quality and intensity of investigations.
  • Overhauling authorisation procedures: Ensuring a more stringent AML process, focusing on shareholding structures, governance frameworks, internal controls, and business models.
  • Rigorously due diligence procedures: Implementing more rigorous due diligence procedures has resulted in a significant increase in refused applications, from 7% in 2017 to 25% in 2018.

Addressing Moneyval Recommendations

In addition to the above initiatives, the MFSA has introduced a Register of Beneficial Owners of Trusts, addressing Moneyval recommendations on beneficial ownership information for trusts.

Future Plans

Looking ahead, the MFSA is planning:

  • Strengthening collaborations with foreign regulators and international bodies: Through training sessions and workshops.
  • Investing in technology and human resources: To better understand sophisticated money laundering methods.
  • Publishing proposed standards for due diligence processes for Company Service Providers (CSPs): Ensuring a safer and more transparent financial landscape in Malta.
  • Formulating a Risk Appetite Statement: Defining the Authority’s risk tolerance and underpinning its strategy.

These measures demonstrate the MFSA’s commitment to preventing financial crimes through robust internal controls, ensuring a safer and more transparent financial landscape in Malta.