Malta passes Moneyval test after addressing anti-money laundering shortcomings

Malta has passed the Moneyval assessment after strengthening its ant-money laundering regime, government sources confirmed.

The Council of Europe body had given Malta until last year to conduct an overhaul of its anti-money laundering legislation. Failure to do so could have led to Malta being greylisted by the Financial Action Task Force, a move that could have spelt the death knell for the financial services industry.

In September 2019, Moneyval, the European branch of the Financial Action Task Force, or FATF, ruled that Malta remains highly exposed to illicit finance but lacks the resources and infrastructure required to prosecute and seize assets from money launderers and the criminals they serve. Malta had until October to implement Moneyval's 58 recommendations for bolstering its campaign against financial crime to avoid inclusion on the group's "grey list" of high-risk jurisdictions.

had said that the authorities appeared unable to quickly pursue high-level and complex money laundering cases related to financial, bribery and corruption offences, highlighting the need for changes and improvements. Among other things, Moneyval had said that limited resources, both human and financial, weigh negatively on Malta’s capability to effectively pursue this offence. “Investigations and prosecutions do not appear to be in line with the country’s risk profile.”

The government submitted its final progress report to the Moneyval experts on 5 October.The reforms carried out included strengthening the roles of the Malta Financial Services Authority and the Financial Intelligence Analysis Unit, setting up the police force’s Financial Crimes Investigation Department and providing training on anti-money laundering crimes to members of the judiciary.

The government submitted its final progress report to the Moneyval experts on 5 October of last year.

It is understood that the process for Moneyval to assess the report and come up with a final decision was delayed as a result of the Covid-19 pandemic, with experts having to postpone their visit to Malta.

While Moneyval has approved of the reforms and given Malta a pass grade, its assessment report will only be officially published later on this year.

In January of this year, Prime Minister Robert Abela expressed his belief that Malta is on the road to satisfy all the Moneyval requirements.

“We implemented the changes put forward by Moneyval and I remind everyone that for years Moneyval has been proposing changes and reforms that needed to take place in our country. And we were the government that implemented what was requested,” he had said.

Since the original Moneyval report, many legislative changes, as well as changes of people at the head of Malta’s investigative bodies have been made. One example of this is the new Police Commissioner, Angelo Gafa.

There were individuals who, because they were prosecuted or investigated, claimed that this was being done to appease Moneyval.

Former OPM Chief of Staff Keith Schembri was only recently charged in court over money laundering offences, and in a Facebook post expressed his belief that the magisterial inquiry conclusions that led to his arrest were done to accommodate Moneyval to the detriment of exemplary people in business and professionals.

Several other arrests – both in relation to this case and not in relation to it – for money laundering have since occurred, with another prominent case being that of Florinda Sultana – the step-daughter of Darren Debono, who stands accused of fuel smuggling.