Improvements to Malta’s AML regime lead to removal from enhanced FATF monitoring

The FATF voted to place Malta under enhanced monitoring in June 2021. The decision surprised the country’s government in light of the positive assessment of Malta by the Council of Europe’s MONEYVAL just a month earlier. In this report, the jurisdiction is rated as fully compliant with 12 of the 40 FATF recommendations and substantially compliant with the other 28 recommendations, with no non-compliance or partial compliance ratings.

When the FATF places a jurisdiction under increased monitoring, the so-called “grey list”, it means that the country has recognized some of the strategic shortcomings of its AML regime, but has committed to quickly address them within an agreed timeframe.

Malta’s return from the greylist last week was due to its “significant progress” in improving its AML regime to meet its commitments under the action plan for strategic weaknesses identified by FATF 2021. These included the detection of inaccurate company ownership information; sanctions against gatekeepers who fail to obtain accurate beneficial ownership information; and investigating tax-based money laundering cases using financial intelligence. As such, Malta is no longer subject to increased monitoring, although it will continue to work with MONEYVAL to support its improvements.

At the same meeting, Gibraltar was placed under increased FATF monitoring as the FATF says it needs to ensure that supervisors use a “range of effective, proportionate and dissuasive sanctions” for AML violations and demonstrate that it is more proactive and successful in pursuing final decisions about confiscation.

Gibraltar was last assessed by the FATF in December 2019 and by June 2022 had a number of targets in front of it. These goals included completing a new national risk assessment; elimination of technical shortcomings in keeping records of beneficial ownership; introduction of transparency requirements for nominee shareholders and directors; strengthening the financial intelligence unit; and refining its AML investigation policy according to the risks.

The FATF states that Gibraltar has made significant progress towards these goals. The jurisdiction has also recently received a positive assessment from MONEYVAL, which concluded that the jurisdiction is now fully or substantially compliant with all but one of the FATF recommendations.

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