Malta’s anti-money laundering regime has been given the thumbs up by Moneyval ahead of a final vote set for next month. The decision means Malta could avoid measures which would have had major repercussions on the country’s financial services sector.
A Council of Europe anti-money laundering expert committee, known as Moneyval, has given positive feedback on a raft of reforms introduced in recent months, government sources have told Times of Malta.
Earlier this month, Malta sent Moneyval a voluminous report, drafted by a specially set-up national coordination centre, on legal amendments and prosecution figures in the fight against financial crime.
One source, privy to government’s discussions with the Council of Europe, said Malta had received indications this week that it had done enough to be given a passing grade.
These indications were circulated among Council of Europe member states in a secret document.
The source said Malta’s efforts to address the shortcomings previously highlighted by Moneyval had been accepted as satisfactory.
Let's hope so.— Roberta Metsola MEP (@RobertaMetsola) March 28, 2021
It should never have come to this. Muscat, Keith & their enablers did not have to put so many businesses through all this uncertainty.
But for the Labour Party, the interests of the crime syndicate came before those of #Malta.
Now they must be held accountable. https://t.co/4mZGOou8wa
The matter is expected to be rubber-stamped when Malta’s regulatory and law enforcement regime is discussed at a plenary session to be held by the Council of Europe in April.
A formal position on Malta will then be announced by Moneyval this coming summer.
The decision on whether or not Malta is ‘greylisted’ will actually be taken by another body, the Financial Action Task Force (FATF), Moneyvval’s global big brother.
There has never been an EU member state on the grey list
Two years ago, Malta failed an exhaustive test of its anti-money laundering rules and policing and has since been at risk of being put on a list of untrustworthy countries, better known as the ‘grey list’. Being put on the grey list comes with a strict reform procedure and ‘hand-holding’ by global authorities.
The grey list does not imply any economic sanctions but serves as a signal to the global financial and banking system about heightened risks from transactions with the country in question.
There has never been an EU member state on the grey list.
Since failing the initial review in 2019, the government has enacted a raft of reforms and personnel changes across a number of watchdogs.
From reforming the police’s economic crimes unit to investing in additional resources for the financial services authority, Malta has sought to address the damning shortcomings flagged by Moneyval.
Perhaps most visible of the changes was an increase in the number of money laundering cases filed in court by the authorities in recent months. These include minor cases of financial impropriety, to the major corruption case involving former OPM chief of staff Keith Schembri, who was last week charged with graft and money laundering.
Meanwhile, Moneyval’s final position is not the last stage in the scrutiny process over Malta. Malta began engaging with the FATF at the start of the year, but a visit to Malta appears to have been put off due to the COVID-19 pandemic.
Times of Malta’s source said that while Moneyval’s approval was an important step forward, the country could not afford to slow down its efforts to reform.
“If we take our foot off the acceleration pedal and stop driving forward these necessary changes, we could end up in trouble with the FATF. So, while we made some good progress, we still have a way to go,” the source said.
Back in January, Prime Minister Robert Abela had said he was confident the country was on track to avoid the greylisting.
A government spokesman confirmed the draft conclusions of the enhanced follow-up report had been received from Moneyval. “The report is being considered a draft and therefore the government does not feel it prudent to comment on its details…
“In the last few months, a number of international institutions praised the investment in our institutions, the unprecedented reforms in regulatory, supervisory and legal sectors as well as the fight against money laundering.”