Financial Crime World

Malta’s Emerging Trends in Financial Crime: A New National Risk Assessment Reveals Challenges Ahead

In an effort to stay ahead of the evolving landscape of financial crime, Malta’s National Coordinating Committee has released its updated 2023 National Risk Assessment (NRA), highlighting key trends and vulnerabilities in Money Laundering (ML), Terrorist Financing (TF), Proliferation Financing (PF), and Targeted Financial Sanctions (TFS).

Aims of the NRA

The NRA, developed in collaboration with government authorities and private sector representatives, aims to provide a shared understanding of the risks associated with these financial crimes among supervisory bodies, law enforcement agencies, and the private sector.

Key Findings

Money Laundering (ML)

  • While ML residual risk has decreased across most sectors since 2018, several industries remain high-risk, including:
    • Financial institutions
    • Company service providers
    • Tax advisors
    • Dealers in immovable property and high-value goods
    • Legal persons
  • These entities are advised to prioritize enhanced mitigating measures to mitigate their exposure.

Terrorist Financing (TF)

  • The TF residual risk for Malta is rated as “Medium”, driven by various threats and vulnerabilities across sectors and financial instruments, including:
    • Funds being moved for terrorist purposes via financial institutions
    • Involvement of Maltese legal persons with beneficial owners in high-risk jurisdictions linked to terrorism
    • Cash cross-border movements
    • Disbursements from voluntary organizations

Proliferation Financing (PF) and Targeted Financial Sanctions (TFS)

  • The PF and TFS residual risk is also rated as “Medium”, primarily due to risks related to:
    • Money transfer services used to conduct cash transfers for proliferation activities
    • Cross-border smuggling of cash
    • Use of trade finance products in the procurement of proliferation-sensitive goods

Recommendations

As Malta’s financial sector moves forward, subject persons are encouraged to incorporate the findings and recommendations from the 2023 NRA into their annual business risk assessments. The National Coordinating Committee is available to provide assistance with this process.

By staying informed about these emerging trends and vulnerabilities, Maltese businesses can better mitigate their exposure to financial crime and contribute to a safer and more secure financial environment.