Malta has been described as a “success story” during FATF meetings this week, Prime Minister Robert Abela said on Friday.

Welcoming Malta’s removal from the FATF grey list, Abela said the country has proven it is a serious and reputable jurisdiction.

Abela said he agrees with those who say Malta should never have gotten into this position in the first place, and should never put itself in such a position again.

He said he had given clear direction for action over expert reports by Moneyval criticising Malta’s efforts to fight financial crime. Abela said prior to 2013, when Labour ascended to power, Moneyval reports used to be shelved.

The prime minister said the action plan drawn up together with the FATF in 2021 had been acted upon and implemented in a “record” 12 months. This proves that Malta is a serious jurisdiction, and will remain attractive to all investors.

He vowed the government will keep up the fight against high-level criminality and organised crime.

The prime minister thanked the heads of the FIAU, police, Attorney General, MBR, Inland Revenue and MGA for their joint effort in helping Malta get off the grey list.

FATF president Marcus Pleyer said on Friday that Malta is "cracking down" on money laundering but has "more work to do".

In a statement, the FATF said Malta had made "significant progress" and had "strengthened the effectiveness" of its anti-money laundering regime to combat the "strategic deficiencies" the body had highlighted last year.

Explaining the decision to take Malta off the list, Pleyer said the island had doubled the resources of its business registry and conducted a thorough risk assessment.

Questioned about what had become of investigations into former prime minister Joseph Muscat, his chief of staff Keith Schembri and former minister Konrad Mizzi, Abela said there are pending magisterial inquiries, and the government cannot interfere in those processes.

Abela said the government had given inquiring magistrates “uncapped resources” to carry out their work.

Removal from greylist 'just the beginning': PN

The PN said in a statement it hoped the removal from the FATF greylist was "just the beginning", and that the government learnt from "this sad experience".

The removal, spokesperson Jerome Caruana Cilia said, was positive news.

"With this news comes the onus of maintaining standards, building further robust control mechanisms and heightening our collective vigilance. We cannot afford to let our guard down.

"Everyone, including the cabinet of ministers, is painfully aware of how the government's lax governance structure negatively impacted the country's potential and cast a long shadow on us," he said.

"We need to learn from this sad experience brought about by serious shortcomings in Malta's governance system," he added. 

Noteworthy example of public-private collaboration: bankers

The Malta Bankers’ Association meanwhile noted this was a moment to acknowledge the "significant efforts and hard work" by the authorities and the financial services industry: "a noteworthy example of public-private collaboration, leading to overall progress in the island’s remediation journey". 

The MBA added that its member banks remained fully committed to the highest standards required of them as gatekeepers in what it called "the constant fight against money laundering, terrorist financing and all forms of economic crime".

Do not let standards slip, Chamber of Commerce warns

The Chamber of Commerce warned it was important that government and regulatory authorities, and the private sector, collectively ensured standards are not allowed to slip.  

"We should turn this unpleasant experience into a springboard for a proactive renewal of the financial services industry in Malta."

The past year has been challenging for many businesses exposed to international payments as a result of the greylisting and has seen Anti Money Laundering compliance costs rise significantly for operators in the financial services sector, it noted.

"We have also seen intensive efforts by regulatory authorities such as the Financial Intelligence Analysis Unit and the Malta Business Registry to address the concerns flagged a year ago in the shortest time possible.

"The target of being removed from the list has been achieved, but this is only the first step. The next objectives need to be achieving a sustainable regulatory environment whereby AML obligations will be more risk-based, proportionate to the size of the business, and effective at rebuilding our reputation as a reliable and competitive jurisdiction."

Striking this balance going forward will be key to restoring Malta's position as a leading financial services provider and developing those segments of the industry where we can have a competitive edge, the chamber added.