Investigators’ competence and prosecution rates need to be improved following Moneyval’s poor review of Malta’s anti-money laundering measures, according to Finance Minister Edward Scicluna.
Times of Malta has reported that Malta failed an assessment of its financial laws and their enforcement. Experts from the Committee of Experts on the Evaluation of Anti-Money Laundering Measures (Moneyval) gave the island just over a year to get its house in order or face potential blacklisting.
Sources said that Moneyval had, in particular, zeroed in on shortcomings in the investigation and prosecution of financial crime.
Asked about this on Friday, Prof. Scicluna said the current system, under which the Financial Intelligence Analysis Unit collects intelligence, packages it and sends it to police to start a whole new investigation, needed to be overhauled.
“I think that has to change, especially when it comes to economic and financial crime,” he said.
“The police will carry on investigating economic crime. But financial crimes of a certain size, emanating from banks and financial institutions, require something else. We need experts, we need a much higher level of competence in the investigation,” he said.
Prof. Scicluna said a new agency geared towards investigating organised and large-scale financial crime would be taking over and even prosecuting those involved.
Asked if this was a vote of no confidence in the police’s ability to investigate, the minister said it was not.
You see what needs to be done and you address it
Sources in the police, however, have said the Economic Crime Unit was displeased with the introduction of this new agency, which is viewed by some as set to take over their role.
Prof. Scicluna said the government was looking at how the new agency’s jurisdiction would be defined to ensure it was clear who was responsible for probing crimes.
“Just like when it is clear [in the US] that some crimes go to the FBI [for investigation] and not the local police.”
Prof. Scicluna said he had just come back from a visit to the UK to see how their financial crime agency worked and how this model could be applied to Malta.
Sources said another issue high on the priority list was what the Moneyval experts highlighted as a shortfall of prosecutions.
“Once we see to prosecutions, which are not easy in the money laundering area – every government has told us that – we hope that we won’t have a shortage. We want to see a normal flow of prosecutions in this area, as there is for any other types of crime,” Prof. Scicluna said.
Prof. Scicluna would not be drawn on the final score that Moneyval had given the country.
“I’m sorry to disappoint you, but Moneyval is not in [yet]. We are obliged to follow the Council of Europe procedures in all of this, and they have underlined the fact that they do not want any leaks,” he said, adding that the final report would be published next month.
“So when we respect the procedures of Moneyval we will have no problem discussing this. We have no issues. It is a peer review. We have areas where we are strong, others where we are not so strong and others where we are weak.”
Moneyval assesses countries’ effectiveness in combatting money laundering across 11 key areas, referred to as ‘immediate outcomes’. To pass the evaluation, countries have to get a particular grade in at least three of the 11 areas.
Sources have said that Malta only managed to secure a ‘substantial’ score in two of the sections – the implementation of international sanctions and international cooperation. This is considered a failing grade.
Prof. Scicluna said the assessment was ultimately based on a review conducted by the local authorities prior to the Moneyval visits.
While expressing reservations over some of the report, he said there was no arguing that it had not been a thorough review, adding that the government was committed to implementing all the recommendations.
He compared the review process to a medical check-up: “You see what needs to be done and you address it.”