Malta’s next assessment on its preparedness to combat financial crime is expected between the years 2027 and 2028, FIAU director Alfred Zammit has confirmed. This follows the global AML watchdog’s decision to introduce shorter cycles to evaluate jurisdictions and is in line with MONEYVAL’s planned calendar of evaluations. Malta was last assessed by MONEYVAL in November 2018.

This will be the first major test to Malta’s technical readiness and effectiveness in combating money-laundering after successfully exiting the Financial Action Task Force (FATF)’s enhanced monitoring procedure, commonly known as grey-listing, back in 2022.

Malta was removed from this procedure after one year, having acted quickly to address deficiencies associated with tax evasion and the identification of ultimate beneficial owners of companies operating from the island.

According to Zammit, as a jurisdiction we need to view this next assessment as an opportunity for growth. “A lot of work has been done to improve compliance across both the public and private sectors, and the way forward is to continue on this path. It is important to avoid becoming complacent and continue working on improved AML/CFT compliance, focusing on CDD measures on a risk-based approach, the reporting of suspicion, and effective supervision and enforcement,” he explained.

The next evaluation cycle is expected to place greater emphasis on major risks which jurisdictions face.

Asked to identify the biggest struggle countries will face in preparing for the upcoming assessments, Zammit notes that contrary to the previous cycle, the financial and non-financial sector will be assessed separately for preparedness and supervisory effectiveness.

“While the financial sector has upped its game remarkably in the fight against financial crime, there is ground for improvement in the non-financial sector”.

Zammit explains that the FIAU is focusing on sector specific guidance and outreach and is also open to discussions with subject persons if they have difficulties. Furthermore, when updates to procedures are required, these are made in consultation with subject persons. In fact, during the final quarter of 2023, the FIAU published a consultation document for this purpose.

“As a result of the National Risk Assessment, both the national competent authorities and the subject persons are better placed to know which risk areas need addressing and to target actions accordingly. This is complemented by investments in compliance tools and mitigation measures by subject persons. These efforts need to be ongoing and collaboration between all stakeholders, which is a cornerstone in the AML/CFT field, needs to continue to grow,” the FIAU director remarked.

The NRA found that risks from money laundering in Malta have decreased compared to 2018, reflecting the effectiveness of mitigating measures implemented by authorities and the private sector. However, it also pointed out that the abuse of cash and cash-based businesses, the use of Maltese registered companies lacking sufficient links to Malta, complex corporate structures, and the acquisition of high-value movable and immovable property present a higher level of risk.