FATF due to visit Malta to confirm AML action plan

The Financial Action Task Force (FATF) will visit Malta this Friday, to clarify whether the island’s financial authorities have completed the assigned action plan on AML policies. 

Malta had previously been placed on a greylist of financially risky jurisdictions by the FATF – the G7’s AML and anti-terrorist financing investigative unit – after the task force identified a number of AML discrepancies. 

The island’s authorities may be hopeful that the FATF’s visit later this week to confirm the achievements of its action plan – something the Mediterranean country was assigned in order to secure its removal from the greylist – will result in said removal. 

Drafted last year by Finance Secretary Alfred Camilleri, stipulations of the action plan included a requirement for registered companies to showcase transparent ownership of business and assets, with any firms that did not comply with such orders hit with a sanction.

Speaking at the time Malta was placed on the list, President Robert Abela pledged that: “We remain committed to making whatever reforms are needed while preserving the national interest. 

“We will never be uncooperative or obstructive but will intensify our resolve to fight money laundering and the financing of international terrorism.”

Although the listing of Malta as potentially financially untrustworthy – alongside 19 other countries including Zimbabwe and Syria – had minimal immediate impact on the island’s ratings or those of its domestic rated banks according to Fitch Ratings, it is a negative shadow over the territory’s reputation that its officials are likely keen to shed.

As a major fiscal centre, the gambling and financial services industries play a key role in Malta’s economy – as of last year, betting and gaming generated €700 million annually and accounted for 12% of the nation’s GDP.

The country also provides a base for headquarters or regional offices of over 250 betting operators including Betsson, Tipico and William Hill – as of last year, the gambling industry, directly and indirectly, supported 9,000 jobs on the island.

Malta had been informed prior to the listing that it may be forced to relinquish its EU sports betting veto in order to pass the FATF’s Moneyval test – passage of which was a key requirement in avoiding being included on the greylist. 

Appearing on an SBC Webinar last year, Yanica Sant of the General Counsel of the MGA discussed the impacts of the greylisting on Malta’s economy, maintaining that the development was “very extraneous to the gaming industry”.

She added: “What that means is that the manner in which the gaming industry is regulated and the law and the compliance is not being questioned, and is not being placed under any scrutiny. 

“However there are direct effects and we expected there to be repercussions to businesses like the gaming industry, and it is not unexpected. We understand the inconvenience and the worry that comes with such a direct effect, and that is why every institution in Malta – and we are one of them – have a plan that is being set in motion in order to get out of this greylist.”

Both the Maltese government and MGA have repeatedly asserted that the country’s financial security policies and infrastructure are robust and capable of countering illegal betting and money-laundering in cooperation with law enforcement and sports organisations.