Malta must prioritize the fight against money laundering


Money laundering fuels serious crime and terrorism. It is an essential tool for corrupt, authoritarian and organized criminal groups to profit from their illicit activities, move dirty money and expand their influence. Drug gangs, arms dealers and smugglers need to launder their illicit money to make it look legitimate.

This contributes to a host of societal problems, including the high cost of living, inequality and job loss, while fueling organized crime. This is why the fight against money laundering must be a priority for all governments. Unfortunately, all too often this is not the case.

As the watchdog of global anti-money laundering and anti-terrorist financing standards, the Financial Action Task Force (FATF) sets international standards, assesses countries and publicly names those that are not doing enough to stop money laundering. The FATF has identified serious issues in the effectiveness of Malta’s anti-money laundering and countering the financing of terrorism system in 2019.

As an international financial center and gateway to the EU market and citizenship, deficiencies posed a risk to the global financial system. After being given the opportunity to make reforms, Malta had a number of outstanding issues. This is why Malta became the first EU country in more than a decade to appear on the FATF’s “grey list” last June.

Following this, the Maltese government made a high-level political commitment to work with the FATF and embarked on a targeted reform program to help crack down on illicit financing. After considerable efforts involving major organizational and operational changes, Malta was removed from the “grey list” earlier this month.

The positive results of the FATF greylisting process are evident to all. Malta has strengthened the collection of information on the ultimate “real” owners of companies, often used to launder illicit funds. This includes focusing on high-risk businesses and conducting inspections, which successfully identified businesses that were hiding their true owners.

Authorities recently imposed penalties for beneficial ownership violations. Equally important, gatekeepers to the financial system, such as lawyers and accountants, are held accountable if they fail to meet their legal obligations to identify and verify owners. Authorities have taken dozens of enforcement actions over the past year, including fines – that compares to zero fines for guards in recent years.

It is imperative that the authorities improve the implementation of Maltese laws-Marcus Pleyer

Malta has focused its financial analysis more on serious tax offences. The quality of intelligence has improved, with new hires, increased use of technology, and outreach to banks and other businesses. This has helped law enforcement to detect and investigate cases corresponding to the most significant money laundering risks in Malta, involving the proceeds of tax crimes.

These achievements only came about through the hard work and determination of public servants who recognized that change needed to be made. These changes have improved the soundness and transparency of the Maltese financial system. This does not mean that the work stops for Malta. As the threat from criminal and terrorist groups is constantly evolving, all countries must remain vigilant.

The Maltese government has a clear, continuous and high-level commitment to continue to strengthen its systems. The FATF welcomes this commitment.

Going forward, I strongly encourage the Maltese authorities to build on the momentum of the gray listing process and continue to prioritize the fight against illicit finance. It is imperative that the authorities further improve the implementation of Maltese laws, in particular with regard to the laundering of illegal proceeds of tax evasion and foreign proceeds of crime.

Malta, like many countries, faces significant challenges. But if Maltese leaders support national authorities’ efforts to track the money behind serious crimes, it will make a positive difference.

I hear assurances from Prime Minister Robert Abela, Finance Minister Clyde Caruana and other senior government officials to proactively pursue effective anti-money laundering measures and create a safer environment for communities financial and commercial. FATF’s regional partner in Europe, Moneyval, will monitor Malta’s progress and report any issues.

By tackling dirty money, the Maltese government will help prevent the damage caused by money laundering and terrorist financing in its own country and around the world. This will help make people’s lives safer and fairer and help create stronger, sustainable and inclusive economic growth. It is worth fighting for.

Marcus Pleyer is the chairman of the global anti-money laundering standards watchdog, the Financial Action Take Force (FATF).

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