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Malta’s Fight Against Money Laundering: Regulations and Progress

Malta, a small island nation in the Mediterranean, has made significant strides in combating money laundering and terrorist financing. The country’s commitment to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations has earned it recognition from international bodies.

History of AML Efforts

In 1994, Malta enacted the Prevention of Money Laundering Act, which established the Financial Intelligence Analysis Unit as the national institution responsible for preventing money laundering and terrorist financing. The unit is tasked with collecting and investigating information about financial crimes.

Reinforcing AML Compliance

To further reinforce AML compliance, the Prevention of Money Laundering and Funding of Terrorism Regulations was enacted in 2019. This legislation aimed to guide and assist subject persons in implementing AML compliance measures effectively. In addition, the Proceeds of Crime Act was enacted in 2021 to enhance the identification and confiscation of proceeds from criminal activities.

Regulatory Oversight

The Malta Financial Services Authority (MFSA) regulates and supervises financial institutions to ensure economic stability. The MFSA and FIAU jointly conduct AML/CFT audits in Malta. An AML/CFT Co-Ordination Committee has also been established to prevent money laundering and terrorist financing.

Progress Against Money Laundering

Recent reports have shown significant progress in Malta’s fight against money laundering and terrorist financing. MONEYVAL, an international body that evaluates countries’ compliance with AML/CFT standards, has upgraded Malta from “partially compliant” to “largely compliant” and “compliant” in nine FATF Recommendations. The country has also achieved full compliance with twelve out of the 40 FATF Recommendations.

Virtual Assets Regulation

Malta’s proactive approach to regulating virtual assets has led to an elevation from “partially compliant” to “largely compliant” status in this area. While some minor deficiencies remain, Malta no longer holds “non-compliant” or “partially compliant” ratings.

AML Regulations and Requirements

The Maltese AML regulations are compatible with EU and FATF regulations, requiring financial institutions to comply with PMLA, PMLFTR, and POCA. Organizations must meet Customer Due Diligence (CDD) requirements and report suspicious transactions to authorized units.

Recent Enforcement Actions

In 2022, the Financial Intelligence Analysis Unit issued more than €3.1 million in fines to entities that had breached PMLA due to lack of business risk assessments.

Customized AML Solutions for Malta

Sanction Scanner, a leading AML compliance software provider, has developed customized solutions tailored for Malta’s distinct regulatory landscape. The company is committed to helping businesses achieve compliance and stay ahead of the evolving AML landscape.