Malta Passes Second Moneyval Evaluation Report

In May 2021, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Funding of Terrorism (MONEYVAL) published its enhanced follow-up report on Malta. The report highlights the considerable efforts made by Malta in the battle against money laundering and the funding of terrorism.

Following an initial assesment in 2019, MONEYVAL  identified several shortcomings and gaps within the local AML/CFT framework. Since then, Malta has made major strides and has no more "partially compliant" or "non-compliant" ratings. The Mutual Evaluation Report (MER), which was undertaken by Rapporteur teams in Jersey and Italy, rated Malta as follows for technical compliance:

• "Fully compliant" with 12 of the 40 Financial Action Task Force (FATF) recommendations; and
• "Largely compliant" with the remaining 28 recommendations.

The main areas of improvement were in the following FATF recommendations:

• Recommendation 8 - The risk of voluntary organisations to terrorist financing;
• Recommendation 13 - The application of mandatory measures regarding correspondent banking relationships to respondent institutions outside the EU;
• Recommendation 15 - Obligations relating to virtual assets and virtual asset service providers;
• Recommendation 20 - The obligation to file suspicious transaction reports promptly;
• Recommendation 24 - The accuracy of beneficial ownership information;
• Recommendation 26 - The prevention of criminals from owning financial institutions and TCSPs;
• Recommendation 28 - The regulation of dealers in precious metals and stones, real estate agents and lawyers;
• Recommendation 36 – The provision implementing Article 5 of the Vienna Convention; and
• Recommendation 38 - The seizing of assets that could be the proceeds of crime or could constitute laundered property.

This news comes as welcome relief for those within the financial services and gaming industries, who are dependent on a reputable status for foreign business.

However, for the time being, Maltese authorities are still required to report back on any further progress made, as part of the enhanced follow-up procedure and may still be grey listed by the Financial Action Task Force ("FATF") (although less likely now).

Several steps may be applied under the enhanced follow-up procedure, such as the application of one of the steps of the compliance enhancing procedures, an action plan may be developed pointing out the outstanding deficiencies, the evaluation under the 5th round may be brought forward or other compliance measures may be applied as deemed appropriate by the plenary. 

A decision on potential greylisting is expected to be made by the FATF at some point in June 2021.