Government mum on implementation of EU anti money laundering rules
The Ministry for Finance has failed to answer The Malta Independent’s questions as to why it has yet to transpose the latest EU anti-money laundering directive into law, as stated by Finance Minister Edward Scicluna himself.
The EU Commission some weeks ago wrote to the Maltese government asking why it had failed to transpose the fourth anti-money laundering directive – which aims to make it harder for terrorist organisations and criminal gangs to hide their money – into law by the 26 June deadline. The EU sent a letter to a total of 14 member states for missing the deadline, while a further three member states have been asked to explain why the measures were only partially transposed.
A typical move by organisations to conceal their wealth is to shift money around European capitals. Before sending the letter, media reports emerged detailing how Brussels had rebuked EU Member States, including Malta, for failing to apply the rules associated with the directive.
The measures require countries to set up national registers showing the ultimate beneficial owners (UBOs) of companies, which can then be accessed by authorities throughout the EU. Europol and other EU law enforcement agencies have said that the plans would make it harder for people to hide assets behind complex corporate structures and simpler for authorities to work together to track suspicious cross-border transactions. They also set together due diligence requirements for banks, lawyers and accountants.
In addition to this, intermediaries must carry out extensive risk assessments of their customers in order to fight money laundering and the financing of
terrorism. The directive broadens the definition of a politically exposed person (PEP), which effectively means that a wider variety of people will be subject to stringent checks, including spouses, family members and close associates of the classically defined politically exposed person.
Back on 30 June 2017, shortly after the missed deadline, The Times of Malta reported Finance Minister Edward Scicluna as saying that the government would transpose the new rules into national law before Parliament broke for the summer.
When asked about the fallout from missing the 26 June deadline, the minister said that the Commission had been assured that the new legislation would make it to Parliament.
Should Malta fail to transpose the directive into law, ordinary infringement procedures would be set into motion, as confirmed by an Commission spokesperson. This newsroom sent questions to the government on 3 August to confirm that the law had not been transposed and to ask for why there was yet another delay. No answers were forthcoming, however.
In terms of what happens next, it is up to the government to respond to the letter, explaining its position. If no observations are sent to the Commission by the government within two months, the Commission may, “if appropriate”, issue a reasoned opinion.
Should no resolution be reached after this, the Commission may file a case with the European Courts of Justice.
Unconfirmed reports say that the government was consumed with the marriage equality bill and other parliamentary business, and that the law would be transposed at the earliest.
The Malta Financial Services Authority (MFSA) presents a link to the directive on its homepage, but a search on the Finance Ministry website came up empty.
The fourth anti-money laundering directive rules were supposed to take full effect across the EU on 26 June but the only nations to provide full confirmation to Brussels that the measures had been implemented on time were the UK, France, Germany, Italy, Spain, Slovenia, Sweden, Austria, Belgium, the Czech Republic and Croatia.
EU Justice Commissioner Vera Jourova said that the performance was unacceptable at a time when the EU has made the fight against illegal finance one of its top priorities in the wake of a spate of terror attacks.