Malta Fosters Best Practices in Preventing Financial Crime
Enhancing Anti-Money Laundering and Countering Funding of Terrorism (AML/CFT) Efforts
The Malta Financial Services Authority (MFSA) has released a status update on its implementation of the 2019 AML/CFT supervisory strategy, demonstrating its commitment to developing and embedding best practices throughout the financial services industry.
Key Achievements
- Established a dedicated Financial Crime Compliance function comprising 20 fully trained employees
- Set up a separate Due Diligence function, providing an additional layer of checks and balances
- Conducted a thorough review of supervisory and authorisation processes
- Integrated AML/CFT elements into all prudential and conduct supervisory work
- Established a new Risk function to assist in the application of the risk-based approach
- Implemented extensive training programs for all employees, including mandatory AML/CFT, Sanctions, and Anti-Bribery and Corruption programs
Strengthening Enforcement Function
- Increased personnel capacity, enabling investigations into potential breaches and prompt action in case of non-compliance
- Requested MLRO substitutions from 16 licence applicants in 2019 and a further 29 in 2020, focusing on fitness and propriety, competence, and personal liability of senior management
Enhanced Supervision and Oversight
- Updated the Trusts and Ultimate Beneficial Ownership Register (TUBOR), which saw a ten-fold increase in registrations since its launch in 2018
- Revised the Company Service Providers regime and increased outreach programs and industry awareness
AML/CFT Control Framework
“The MFSA has managed to increase AML/CFT full-scope examination capacity from 25 in 2019 to 81 in 2020,” said Anthony Eddington, Head of Financial Crime Compliance at the MFSA. “We have considerably enhanced the AML/CFT control framework through more robust intrusive inspections, evidencing effective proportionate and risk-based supervision.”
Detection Methods and Personal Liability
The detection methods implemented by the MFSA act as a credible deterrence to those parties that wish to circumvent or attempt to circumvent AML/CFT controls. With the strengthening of the Money Laundering Regulations in 2020, personal liability is placed upon all significant control function holders.
Culture of Compliance
“Our measure of success is not just in numbers but rather in the improvement of compliance culture of financial services operators in Malta,” added Eddington. “We have seen a positive shift in this respect, with real investment in back-office systems, controls and people. It is more difficult today to launder money through our financial system or to finance terrorism from Malta’s financial institutions.”
Ongoing Development
The MFSA continues to identify areas where it can strengthen its practices through engagement with other Supervisory Authorities, participation in the international community, and an ongoing process of organisational development.
Download the AML/CFT Strategy Update Document
The Authority’s AML/CFT Strategy update document is available for download.