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Malta Edges Closer to Being in FATF’s Good Books
By Shane Addinall Mar 10, 2022 IndustryMalta’s continued efforts to effectively strengthen its AML/CFT regime received recognition from the Financial Action Task Force (FATF), but the EU country remains on the grey list. FATF says one visit from them could change this.The global money laundering and terrorist financing watchdog, FATF, recently had their 6th Plenary where 206 members of the global network met. Discussions at the four-day proceedings included how the island-country Malta managed to substantially improve their AML/CFT regime. The body announced that Malta is one step away from joining the trusted country list again.
Malta first joined the dreaded grey list in June 2021 when the Financial Action Task Force (FATF) motioned for the country to join its list of jurisdictions under enhanced monitoring. This action followed a vote at FATF’s June 2021 Plenary as members found the Maltese authorities lack effective financial assessment protocols.
After months of their high-level political commitment with FATF and MONEYVAL, Malta is one visit away from leaving the grey list.
Malta’s Commitment to Improvement
Malta has a long-standing reputation of being a trusted online gambling regulator in the global market. The country became the first European Union jurisdiction to join FATF’s grey list. Subsequently, the country’s government committed to working with the financial watchdog on an action plan to rectify and strengthen its AML/CFT regime.
The Financial Intelligence Analysis Unit (FIAU) of Malta filed a report prior to June 2021 cautioning that online gambling operators collect insignificant data, leading to vulnerability within AML policies. FATF includes countries on their grey list if they consider them to have strategic shortfalls in their practices to counter money laundering, terrorist financing, and proliferation financing.
In October, FATF indicated that Malta had made substantial progress in their efforts to remedy its AML/CFT shortcomings. An FATF spokesperson said:
“Malta should continue to work on implementing its action plan to address its strategic deficiencies, including by continuing to demonstrate that beneficial ownership information is accurate and that, where appropriate, effective, proportionate, and dissuasive sanctions, commensurate with the money laundering and terror financing risks, are applied to legal persons if information provided is found to be inaccurate.”
Among the suggestions from FATF were that Malta takes advantage of the services at their disposal, such as their Financial Intelligence Unit. This empowers them to pursue financial criminals with the help of FIU, which also offers intelligence on how to identify high-risk cases.
Reaping the Fruits from Their Efforts
At this year’s March Plenary, FATF found Malta made significant progress in their efforts with FATF and MONEYVAL to reinforce efficient AML/CFT procedures. With their action plan being substantially completed, FATF indicated the country’s improvements warrant the last step of an on-site visit.
Should the FATF find upon their on-site visit that the reforms are in motion and sustained, it may remove Malta from the grey list. They will investigate three key areas of reform where Malta already shows a satisfactory improvement on paper. These include beneficial ownership checks, enhanced use of FUI intelligence, and an increased focus on analysis from the FUI for timeous and accurate law enforcement.
With solid protocols in place relating to the focus areas pointed out by FATF, Malta safeguards the economy of their beautiful country from the contagious nature of laundered money and corrupt business. A non-negotiable approach to having above-board financial practices can have a far-reaching effect on the remote gambling industry, where many offshore platforms rely on Maltese licensing.
Waiting Game
While the FATF noted their visit will happen at the earliest possible date, Malta awaits exact dates for D-day. Meanwhile, the country stares at the reality of a tarnished reputation in the face and the uncertainty of how it will affect international investments going forward.
Malta and the gaming industry can only benefit from establishing and maintaining ironclad AML/CFT processes and aid FATF in their mission to make crime and terrorism less profitable.
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