Malta has ended its year-long purgatory as a ‘greylist’ financial jurisdiction of the Financial Action Task Force (FATF) the global AML and anti-terrorist financing watchdog of the G7.
The Times of Malta outlined that the FATF had made the decision to remove Malta from its list of countries under ‘increased monitoring’ and classified as financially untrustworthy.
According to the Times, an FATF meeting in Berlin concluded with a vote at 5pm yesterday, with 37 jurisdictions and the European Commission and the Gulf Cooperation Council participating as members of the international AML body.
Maltese Prime Minister Robert Abela of the Labour Party has stated that he will only comment on the matter when the plenary meeting concludes tomorrow. The PM had previously criticised Malta’s initial placement on the greylist as an unjust decision.
On the other hand, the opposition Nationalist Party has reportedly welcomed the announcement, whilst pointing out that its leader Bernard Grech had earlier argued that Malta could be removed from the greylist within a three month period following the general election in March.
The removal of Malta from the list comes three months after the FATF visited the country to clarify the state of reforms to national financial security, particularly completion of an assigned action plan on AML duties.
Further clarification was also sought on information collection and sharing with local and international financial authorities, and how tax evasion is countered.
Last Summer, Malta was placed on the FATF’s greylist, following complaints from EU member states that the island had little regulatory oversight on its domiciled businesses, tax avoidance and the processing of financial transactions.
Following a MONEYVAL assessment by the FATF, to the embarrassment of the governing Labour Party, Malta was indexed alongside 19 other countries deemed to have ‘strategic deficiencies’ – a list that included Syria, Albania, Myanmar and Zimbabwe.
High-profile scandals saw several Malta-registered businesses implicated in the Panama Papers and Italian police’s ‘Glassia Investigation’, that uncovered Italy’s biggest ever money laundering case.
Immediately following the FATF’s dire evaluation, PM Robert Abela and Finance Secretary Alfred Camilleri, drafted an ‘action plan’ to remove Malta from the greylist by 2023.
Key directives saw Abela instruct the government to overhaul Malta’s Financial Intelligence Analysis Unit (FIAU) and to develop a new company registry for Maltese businesses to show transparency of ownership and assets.
Last October the FIAU ordered that all Malta-domiciled businesses should observe its revised AML commands that established a new operating procedure on customer due diligence, reporting procedures, outsourcing, staff training and vetting, record keeping and interactions with ‘non-reputable jurisdictions’.
Further commands saw Maltese business forced to disclose beneficial ownership in corporate structures, or bodies of persons or legal persons held through trusts or state-owned enterprises”.
A regional hub for gambling, Malta is home to operating centres for several major betting firms such as Betsson and Kindred Group, and the industry accounts for 12% of its GDP at €700m whilst employing approximately 9,000 people.