MALTA FACES RISING THREATS OF MONEY LAUNDERING AND TERRORIST FINANCING
The tiny island nation of Malta has been identified as a major hub for money laundering and terrorist financing, according to recent reports. To combat these growing threats, anti-money laundering (AML) and combating the funding of terrorism (CFT) measures are being stepped up across the country.
Risks and Vulnerabilities
According to Malta’s National Risk Assessment, local criminal groups, drug trafficking, and tax evasion are among the most significant sources of illegal proceeds in the country. The assessment also highlighted banking and corporate service providers as sectors particularly vulnerable to money laundering and terrorist financing.
Measures Implemented
Malta has implemented various measures to address these risks, including:
- Transposition of the 4th Anti-Money Laundering Directive (4AMLD) into national law in 2018
- Working to implement the 5th Anti-Money Laundering Directive (5AMLD), which introduces several key amendments to the 4AMLD
EU Plans for Strengthened AML/CFT Rules
The European Union has announced plans to further strengthen AML/CFT rules across the continent. The EU Commission has proposed the creation of an EU Anti-Money Laundering Authority (AMLA) to coordinate national authorities and ensure consistent application of EU rules. AMLA is expected to be operational by 2024.
Consequences of Non-Compliance
The consequences of failing to maintain effective AML/CFT systems are severe, including:
- Involuntary support of criminal or terrorist entities
- Substantial regulatory penalties
- Reputational damage
Mitigating Risks
To mitigate these risks, organizations must prioritize a strong AML culture, with management buy-in and involvement critical to preventing compliance shortcomings. A comprehensive approach to AML/CFT is essential for Malta’s organizations.
KPMG’s Expertise in AML/CFT
KPMG has extensive experience in assisting subject persons in their AML/CFT journeys, helping them turn compliance into a competitive edge and ensuring greater program agility, effectiveness, efficiency, sustainability, and integration. The firm’s team of experts understands the need for robust, real-world solutions that work within an organization’s business framework while meeting regulatory expectations.
Conclusion
As Malta continues to grapple with these growing threats, it is clear that a comprehensive approach to AML/CFT is essential. Organizations must prioritize compliance and adopt a strong AML culture to mitigate risks and avoid the severe consequences of non-compliance.