Malta’s voluntary sector continues to face “needless” vulnerability to money laundering and terrorist financing, Commissioner for Voluntary Organisations Kenneth Wain warns in his annual report.

Prof. Wain, whose office is responsible for oversight of the sector, said he had been unable to persuade the government of the urgency to introduce amendments to the Voluntary Organisations Act, which would give the Commissioner more powers to police the sector.

The Commissioner said that despite amendments written in collaboration with the government’s anti-money laundering agency (FIAU), the situation in Malta persisted whereby the enrolment of voluntary organisations remained optional.

This meant the Commissioner had no means to ascertain how many non-enrolled organisations were currently active in Malta and Gozo, fundraising with “impunity” and operating under the radar with zero accountability, Prof Wain said.

A White Paper with proposed amendments to the Voluntary Organisations Act was published in April 2016 and vetting by the Attorney General’s office took place in March 2017.

A 2012 assessment by Moneyval, the Council of Europe’s anti-money laundering body, flagged how the lack of compulsory registration with the Commissioner hampered the office’s work in monitoring the voluntary sector’s money-laundering risks.

Moneyval, which will be carrying out another assessment of Malta this year, also noted that the Commissioner’s office was understaffed for the fulfilment of its obligation to protect the sector from money laundering. The Commissioner’s budget for 2017 was €110,000.

The strain of understaffing is palpable

Prof. Wain said the number of staff at his office had hit “crisis levels”, as the complement was not even minimal, let alone ideal. “The Commissioner’s efficiency in carrying out his job is constantly compromised by this fact, and the strain of understaffing is palpable among the staff in his office,” Prof Wain said.

He said the present situation, where the ministry determined and managed the Commissioner’s budget and staffing needs, had to be discontinued.

Prof. Wain said the law regulating his office required the Commissioner to be autonomous from government, yet this could not happen if the Commissioner could not manage his budget, make his own administrative and policy decisions, and recruit and manage his own staff. Over the past 10 years, Prof. Wain said his office had fallen under the remit of no fewer than six ministers.

Every change involved much waste of time and frustration, as each time his office had to go through the “pains” of transferring to a new ministry, briefing new ministers and officials on the Commissioner’s work, getting understanding and approval on projects already started and decisions made, and other frustrations which serious hindered the Commissioner’s progress, Prof. Wain said.

However, the government had greatly improved its practices in the administration of its funding and other schemes for the voluntary sector. He said the “much abused” ministerial power of exemption, which allowed NGO not enrolled with the Commission to still receive government funding, had been discontinued over recent years.

The Commissioner said that in the past few months, great improvements had been recorded in the administration of funds for Gozo by the Gozo Ministry.

During this time, the ministry had shown its intentions to work within the law by introducing measures of transparency and fairness, Prof. Wain said.

Last year, Prof Wain called for an investigation by the Auditor General into the ministry’s “disregard of the law” in its administration of the Gozo NGO fund.

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