Financial Crime World

Maltese Companies Used as Money Conduits, Says FIAU

The Financial Intelligence Analysis Unit (FIAU) has released a report highlighting concerns over Maltese companies being used to facilitate illegal transactions by moving funds from one point to another.

The report reveals that many foreign natural persons have been involved in tax-related cases involving Maltese companies. These companies often lack a clear commercial rationale for their transactions, leading investigators to suspect money laundering or other financial crimes.

Services with Red Flags

Some companies set up to provide consulting, marketing, or research services have been found to be receiving significant amounts of funds without sufficient supporting documentation. In many cases, the only invoices provided are from these companies, with no contracts or letters of engagement in place.

Red Flags to Look Out For

Subject persons should look out for the following red flags when dealing with Maltese companies:

  • Companies with high turnover and low average balances
  • Accounts receiving funds from multiple jurisdictions without a clear commercial rationale
  • Foreign beneficial owners who cannot justify the presence of a Maltese product
  • Companies set up to provide marketing, consulting, or research services, which pose a higher risk due to their business nature
  • Long periods of inactivity followed by sudden increases in financial activity

High-Value Assets and Concealment of Beneficial Ownership Information

The FIAU has also noted concerns over foreign-owned Maltese companies purchasing high-end properties and vessels without clear justification. Additionally, subject persons should be aware of structures set up to circumvent beneficial ownership disclosure legislation, such as discretionary trusts without proper justification.

Adverse Information Searches

Finally, the FIAU emphasizes the importance of conducting searches for adverse information, which can be found through primary search engines, official records, or social media. This non-intrusive method is essential in identifying potential money laundering and other financial crimes.

Conclusion

The report serves as a warning to subject persons to remain vigilant when dealing with Maltese companies and to take proactive measures to prevent the misuse of these companies for illegal activities. By being aware of the red flags and taking steps to identify potential money laundering, we can all contribute to a safer and more transparent financial environment.