Financial Crime World

Malta Small Businesses on High Alert as Compliance Risks Come into Focus

A recent National Risk Assessment (NRA) conducted by Malta’s authorities has highlighted key compliance risks that small businesses operating in the country need to be aware of. The assessment focuses on money laundering, terrorist financing, proliferation financing, and targeted financial sanctions, providing a comprehensive overview of the threats and vulnerabilities faced by Maltese businesses.

Key Findings

The NRA identifies several sectors as being at higher risk due to factors such as:

  • Abuse of cash and cash-based businesses
  • Use of Maltese registered companies lacking sufficient links to Malta
  • Complex corporate structures
  • Acquisition of high-value movable and immovable property

These sectors include:

  • Financial institutions
  • Real estate agents
  • Dealers in high-value goods

Money Laundering Typologies

The NRA also highlights money laundering typologies that pose a higher level of residual risk, including:

  • Laundering of proceeds from drug trafficking
  • Foreign organized crime
  • Fraud, including cybercrime

Some sectors have registered lower levels of risk, including:

  • Legal persons
  • Trust and company service providers
  • Banking
  • Investment services
  • Accountants and auditors
  • Gaming
  • Virtual financial assets service providers

What’s Next?

All subject persons are required to consider the risks identified in the latest NRA as part of their risk assessment process. This includes:

  • Reviewing and updating controls, policies, and procedures as necessary to reflect and mitigate the identified risks

The 2023 NRA is available for download and serves as a crucial tool for businesses to stay ahead of compliance risks and ensure they are meeting regulatory requirements.

Consequences of Non-Compliance

Failure to comply with these regulations can result in severe consequences, including:

  • Fines
  • Reputational damage

Prioritizing Compliance

As Malta’s small businesses navigate this complex landscape, it is essential that they prioritize compliance and take proactive steps to mitigate the identified risks. By doing so, they can not only avoid potential penalties but also maintain a strong reputation and ensure the long-term sustainability of their operations.

By staying ahead of compliance risks and ensuring regulatory requirements are met, Malta’s small businesses can protect themselves from potential threats and maintain a competitive edge in the market.