Financial Crime World

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Malta Financial Crimes: Definition and Fight Against Money Laundering and Terrorist Financing

Recent years have seen a growing concern about financial crime in Malta and worldwide. The rise of technology has made it increasingly complex for authorities to track and prosecute criminals who engage in fraudulent activities.

Categories of Financial Crime

Financial crimes can be broadly divided into two categories:

  • Wealth generation: These crimes involve generating wealth dishonestly.
  • Proceeds protection: These crimes involve protecting the proceeds of criminal activity. Examples include money laundering, which involves concealing the source of illegally obtained funds, and terrorist financing, which involves using legitimate means to fund illegal activities.

MFSA Priorities for 2021

The Malta Financial Services Authority (MFSA) has identified financial crime compliance as a key priority for 2021. The authority will also focus on:

  • Governance and culture
  • Retail investor protection
  • Cross-border operations
  • Cybersecurity
  • Financial soundness

The MFSA’s Supervisory Priorities outline the themes on which the authority will focus its supervisory efforts throughout the year.

Financial Crime Compliance (FCC) Function

The FCC function plays a crucial role in detecting and reporting suspicious transactions. As an agent of the Financial Intelligence Analysis Unit (FIAU), the MFSA collaborates with the FIAU to conduct anti-money laundering and combating the financing of terrorism (AML/CFT) supervision of authorized entities.

AML/CFT Supervision

The MFSA has integrated AML/CFT into its supervisory work, providing input from an AML/CTF point of view in various sectoral functions. This includes:

  • Applications for authorization
  • Supervisory interactions
  • Risk rating systems
  • Enhanced training on anti-financial crime

Periodic Publications and Collaboration with FIAU

In 2021, the FCC function will issue periodic publications to update the industry on developments concerning AML/CFT and the current status of the AML regime. The MFSA will also continue its positive collaboration with the FIAU and monitor the compliance of regulated persons with AML/CFT obligations.

For more information on the MFSA’s Supervisory Priorities for 2021, visit their website at https://www.mfsa.mt/wp-content/uploads/2020/12/MFSA-Supervision-Priorities-2021.pdf.