Financial Crime World

Malta Takes Stand Against Financial Crimes: Proactive Approach Yields Significant Progress

Malta, a small island nation in the Mediterranean Sea and member of the European Union (EU), has been making strides in combating money laundering and terrorist financing. The country’s commitment to preventing financial crimes dates back to 1994 when it enacted the Prevention of Money Laundering Act (PMLA) and established the Financial Intelligence Analysis Unit (FIAU).

Strengthening Legislative Framework

Since then, Malta has continued to strengthen its legislative framework by:

  • Adopting the Prevention of Money Laundering and Funding of Terrorism Regulations (PMLFTR) in 2008
  • Introducing the Proceeds of Crime Act (POCA) in 2021

These regulations have enabled Malta to expand its ability to identify and confiscate proceeds from criminal activities.

Key Institutions

At the heart of Malta’s financial regulatory landscape are two key institutions:

Malta Financial Services Authority (MFSA)

The MFSA oversees and regulates financial institutions, ensuring they operate in accordance with Maltese legislation.

Financial Intelligence Analysis Unit (FIAU)

The FIAU is responsible for collecting, analyzing, and reporting financial crime information to help prevent money laundering and terrorist financing.

AML/CFT Co-Ordination Committee

In addition to these institutions, the AML/CFT Co-Ordination Committee was established to:

  • Coordinate and enhance Malta’s efforts in fighting money laundering and terrorist financing
  • Promote best practices and guidelines that support Maltese legislation

The committee collaborates with regulatory bodies, financial institutions, and other stakeholders to achieve its goals.

Progress and Challenges

Malta has made significant progress in countering money laundering and terrorist financing. The latest MONEYVAL report upgraded the country from “partially compliant” to:

  • “Largely compliant” in nine Financial Action Task Force (FATF) Recommendations
  • Full compliance with twelve out of forty FATF Recommendations

Despite this progress, Malta continues to be subject to enhanced follow-up assessments to monitor the effectiveness of its AML/CFT measures. The country’s AML regulations are designed to be compatible with FATF and EU regulations.

Recent Enforcement Actions

In 2022, FIAU imposed fines totaling more than €3.1 million on entities that breached PMLA regulations, primarily due to insufficient business risk assessments. This serves as a warning to businesses operating in Malta to ensure they comply with the country’s AML regulations.

Maintaining Compliance

To achieve AML compliance in Malta, Sanction Scanner offers customized solutions tailored to the country’s regulatory landscape. Its software addresses the unique requirements of Maltese legislation, making it an effective tool for businesses looking to maintain compliance.

With its proactive approach and innovative solutions, Malta is well-positioned to continue combating financial crimes and maintaining a strong reputation as a responsible financial hub in the EU.