Financial Crime World

Financial Crime Investigation Techniques in Malta Take a Significant Leap Forward

Malta’s financial regulator, the Malta Financial Services Authority (MFSA), has been working diligently to revamp its anti-money laundering (AML) standards and procedures ahead of the publication of the Moneyval report on September 12th.

Enhancing AML Standards and Procedures

The MFSA has implemented significant changes to ensure AML is integrated into its supervision process, following extensive consultations with local and international institutions. The agency has taken concrete steps over the past year to strengthen its financial crime investigation techniques.

Key Initiatives

  • Establishment of a dedicated Financial Crime Compliance function, which has enabled the agency to achieve an unprecedented level of depth and quality in joint inspections with the Financial Intelligence Analysis Unit (FIAU).
  • Engagement of 10 international experts to support the MFSA’s efforts.
  • Intensified collaboration with the FIAU, leading to a substantial increase in the number of inspections carried out.

Authorisation Procedures Improved

The MFSA has also improved its authorisation procedures to ensure a more stringent AML process. The agency is now focusing on:

• Shareholding structures • Governance frameworks • Internal controls • Business models presented by applicants

Higher Due Diligence Expectations

The MFSA has reviewed its definitions of “fit and proper” procedures, setting higher due diligence expectations for licence applicants. In 2018, the agency refused 25% of applications, a notable increase from the 7% in 2017.

Introduction of Register of Beneficial Owners of Trusts

The MFSA has also introduced a Register of Beneficial Owners of Trusts to address Moneyval recommendations on beneficial ownership information. This register will be extended to all trusts by January 2020.

Future Plans

The MFSA plans to:

  • Strengthen its collaborations with internal institutional bodies and foreign regulators
  • Invest in technology and human resources to better combat financial crime
  • Publish a consultation document outlining proposed standards for due diligence processes by company service providers (CSPs) later this year
  • Publish a Risk Appetite Statement defining the amount of risk the Authority is willing to accept in the coming months

Commitment to Staying Ahead of Financial Crime

These initiatives demonstrate the MFSA’s commitment to staying ahead of financial crime and ensuring Malta remains a trustworthy and stable financial hub in Europe.