Malta has sent its final progress report to Moneyval experts in a bid to avoid being placed on a grey list of countries that pose a high-risk of financial crime.
The report was sent to the Council of Europe’s experts on October 5, and includes the legislative changes implemented by the country after it failed an assessment of its anti-money laundering regime.
Moneyval will now assess Malta’s efforts and give its verdict to the global body, the Financial Action Task Force, which fights money laundering and the financing of terrorism.
A team of experts from the FATF will visit Malta between December and early 2021, for an assessment on whether Malta is put on a list of untrustworthy financial jurisdictions – the grey list.
Grey-listing could have far-reaching consequences for the economy, seriously impacting the country’s attractiveness as a financial centre.
The assessment by the FATF was automatically triggered after Malta failed the test of the Council of Europe monitoring body. The country was given a year-long window to implement recommendations, such as legislative reform and an increase in the number of prosecutions for financial crimes. Since then a new law has been proposed by Justice Minister Edward Zammit Lewis that targets organised crime and allows the seizure of cars and property purchased through suspected money-laundering without a criminal conviction.
Grey listing could have far-reaching consequences
However, the main sticking point for Malta appears to be the implementation of anti-money laundering laws by the authorities.
The Moneyval review had found that Maltese law enforcement was unable to quickly pursue high-level and complex money laundering cases related to financial, bribery and corruption offences.
Since the report was published, senior police officials, including those responsible for investigating financial crime, have been replaced.
There have also been some high-profile arrests in money-laundering investigations, including the former prime minister’s chief of staff, Keith Schembri, who is on police bail.
Sources said the FATF will be taking a hard look at the police as well as the main regulators on the island in the first quarter of 2021.
The FATF’s ‘grey list’ is one stage away from the blacklist, applicable to countries judged to pose a threat to the entire global financial system.
Its grey list includes countries deemed to be not doing enough to keep money launderers at bay.
At the start of 2020, just two countries were on the blacklist – Iran and North Korea. The grey list, on the other hand, includes 18 jurisdictions, from Albania to The Bahamas.