Financial Crime World

Malta’s Financial Crimes Definition Takes Center Stage in 2023 National Risk Assessment Report

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A comprehensive review of Malta’s anti-money laundering (AML) and counter-terrorism financing (CFT) framework has been conducted by the country, following international evaluations by bodies such as Moneyval, the European Banking Authority, the European Commission, and the International Monetary Fund.

Background

Malta’s AML/CFT framework was reviewed in 2019, which identified areas for improvement. This led to a major overhaul of the framework, resulting in substantial compliance with Financial Action Task Force (FATF) standards.

Key Developments

  • The country has been removed from FATF’s enhanced monitoring list in 2022.
  • Improved mitigating measures and increased political determination have contributed to this achievement.
  • Malta’s efforts have been recognized internationally, highlighting the importance of ongoing vigilance and adaptation to emerging risks.

National Risk Assessment (NRA) Report

The NRA report highlights significant progress made by Malta since its previous assessment in 2018. The report includes a detailed sectoral risk analysis, which:

Key Findings

  • Sectors such as financial services, designated non-financial businesses and professions (DNFBPs), and virtual financial asset service providers (VFASPs) have seen a decline in residual risk due to enhanced regulatory and governance measures.
  • The report emphasizes the importance of ongoing vigilance and adaptation to emerging risks, particularly in the evolving digital finance space.

Recommendations

  • Ongoing investments in technology and personnel are necessary to ensure effective AML/CFT measures.
  • Legislative reforms have solidified the AML/CFT framework, achieving better compliance with international standards.
  • The report highlights the importance of international cooperation in supervising virtual financial asset service providers (VFASPs).

Conclusion

Malta’s 2023 NRA articulates the country’s ongoing commitment to combating money laundering, terrorism financing, proliferation financing, and ensuring compliance with targeted financial sanctions requirements. While recognizing progress made, the report emphasizes the need for continuous improvement in risk understanding, legislative and regulatory frameworks, and operational effectiveness.

Future Directions

  • Malta will continue to focus on a risk-based approach, ensuring that measures are both effective and adaptable to the evolving financial landscape.
  • Ongoing investments in technology and personnel will be necessary to ensure effective AML/CFT measures.