Financial Crime World

Strengthening Financial Sector: Malta Tightens Grip on Anti-Money Laundering and Combating Terrorism Regulations

Malta has taken significant steps to strengthen its financial sector by increasing regulatory scrutiny on anti-money laundering (AML) and combating the funding of terrorism (CFT) regulations. This move comes in response to the country’s National Risk Assessment (NRA), which identified local criminal groups, drug trafficking, and tax evasion as the main sources of illegal proceeds.

Higher-Risk Sectors Identified

The NRA flagged sectors such as banking and corporate service providers as being higher-risk areas for money laundering and terrorist financing. To mitigate these risks, Malta has implemented stricter AML/CFT regulations to ensure compliance with international standards.

EU Regulatory Framework

In 2018, Malta transposed the 4th Anti-Money Laundering Directive (4AMLD) into national law, while the 5th Anti-Money Laundering Directive (5AMLD) is currently being transposed. The European Union has also introduced a package of legislative proposals aimed at strengthening AML/CFT rules across the bloc.

Key Proposals

  • Establishment of an EU Anti-Money Laundering Authority (AMLA), which will oversee national authorities to ensure consistent application of AML/CFT regulations.
  • Support for financial intelligence units in their efforts to combat illicit flows.
  • Operational by 2024, AMLA will play a crucial role in ensuring effective implementation of AML/CFT regulations.

Consequences of Non-Compliance

Failure to maintain effective AML/CFT systems can result in serious consequences, including:

  • Involuntary support for criminal or terrorist entities
  • Regulatory intervention with substantial monetary penalties
  • Reputational damage

Importance of Developing an AML Culture

Organisations must prioritize developing a strong AML culture to prevent compliance shortcomings. This requires:

  • Management buy-in and involvement
  • Implementation of integrated controls to meet compliance objectives
  • Continuous training and monitoring to ensure staff are aware of the importance of AML/CFT regulations

Expertise in AML/CFT Regulations

KPMG, a leading professional services firm, has extensive experience in helping organisations navigate AML/CFT regulations in Malta and globally. Our team provides:

  • Robust, real-world solutions tailored to our clients’ business needs
  • Full compliance with regulatory expectations
  • Expertise in Malta and internationally to help organisations turn compliance into a competitive edge

By partnering with KPMG, organisations can benefit from increased program agility, effectiveness, efficiency, sustainability, and integration.