Financial Crime World

Malta’s Financial Crime Trends: A Proactive Approach to Combating Money Laundering and Terrorism Financing

Introduction

Malta has made significant strides in combating financial crime, as highlighted in its latest National Risk Assessment (NRA) on money laundering (ML), terrorism financing (TF), proliferation financing (PF), and targeted financial sanctions (TFS). The 2023 NRA marks a comprehensive review of the country’s anti-money laundering and counter-terrorism financing (AML/CFT) framework.

Decline in Residual Risk

The assessment reveals a decline in residual risk across key sectors, including:

  • Financial services
  • Designated non-financial businesses and professions (DNFBPs)
  • Virtual financial asset service providers (VFASPs)

This is attributed to enhanced regulatory measures, improved governance practices, and increased coordination among authorities. The NRA also underscores the importance of ongoing vigilance and adaptation to emerging risks, particularly in the evolving digital finance space.

Progress Made

Malta’s efforts have led to notable progress, including its removal from the Financial Action Task Force (FATF) enhanced monitoring list in 2022. This achievement is largely attributed to improved mitigating measures and increased political determination to strengthen the AML/CFT regime.

  • Company Service Providers: The NRA highlights efforts to ensure company service providers (CSPs) meet high standards of governance, risk management, and compliance.
  • Virtual Financial Assets: Significant client engagement in the virtual financial assets (VFA) sector is noted, emphasizing the importance of international cooperation in supervising VFASPs.

AML/CFT Strategy

Malta’s AML/CFT strategy remains focused on a risk-based approach, ensuring that measures are both effective and adaptable to the evolving financial landscape. The country has made significant investments in technology and personnel to bolster the capabilities of entities like:

  • Financial Intelligence Analysis Unit
  • Malta Financial Services Authority
  • Malta Gaming Authority

Continuous Improvement

While recognizing progress made, the report emphasizes the need for continuous improvement in:

  • Risk understanding
  • Legislative and regulatory frameworks
  • Operational effectiveness

Malta’s proactive approach to combating financial crime is a testament to its commitment to maintaining a robust AML/CFT regime.