‘We learned our lesson from greylisting, these mistakes will not happen again’ – Finance Minister

Last Updated on Thursday, 24 November, 2022 at 9:29 am by Andre Camilleri

The government has learned its lesson after being placed on the Financial Action Task Force’s grey list, Finance Minister Clyde Caruana said, and he pledged that these “mistakes will not happen again.”

Malta was only removed from the grey list last June. The finance minister spoke at the launch of the Financial Intelligence Analysis Unit’s (FIAU) strategy for the years 2023-2026.

Caruana said that the way in which the government has handled this turnaround shows the government’s intention to combat money laundering and the funding of terrorism

Caruana spoke very highly of the FIAU who he said were able to turn things very quickly during a very tough period of time. He praised the role of the FIAU within the financial sector and how its work enhances the financial sector in Malta.

He mentioned how 10 years ago, the FIAU had just 13 employees, with a budget of €380,000, whereas today, the number of employees has increased tenfold, and next year it will have a budget of 11.5 million.

He spoke about the importance of having a well-structured jurisdiction that will attract good business which will stimulate Malta’s economy. “Our jurisdiction is of such high quality that it attracts business that makes sense. The business that we attract must be of sound reputation,” he said.

Not only does it help the financial sector, but Caruana spoke about how the FIAU’s work is important for Malta’s reputation. 

The FIAU’s strategy focuses on six pillars aimed at improving efficiency, enforcement, and internal communication.

The FIAU Director, Kenneth Farrugia, said that a new strategy seeks to improve the FIAU’s services and to adapt to the changing times. He said that the strategy aims to do anything that is necessary to protect Malta’s financial sector from any money laundering (ML) risks.

Farrugia said that the strategy was drafted internally and worked on by staff, however added that the FIAU consulted with representative bodies and subject persons from both the public and private sectors.

Farrugia also said that the FIAU is helping other jurisdictions like Libya and Montenegro to implement anti-money laundering frameworks.

The FIAU’s Head of Strategy, Policy and Quality Assurance Alex Mangion said that this was the first time that the FIAU is shaping its own future, goals and objectives.

Mangion said the strategy will ensure that every team is working towards the same goals, and it will work towards increasing enforcement and efficiency through automating systems and risk assessments.

The foundation of the strategy will depend on six pillars: 1) Effective and proportionate anti-money laundering (AML)/countering the funding of terrorism (CFT) measures, 2) Generating and disseminating useful financial intelligence, 3) Effective international engagement, 4) A risk-focused FIAU, 5) Efficient internal communication and coordination, 6) Enabling the FIAU.

For the first pillar, the FIAU is looking to understand what the main threats to Malta are and which sectors are the riskiest, they said.

By implementing a risk-based compliance monitoring plan, priority will be given to the risky sectors, particularly to known vulnerabilities in the application of AML/CFT obligations, they said.

Under this pillar, the FIAU plans on stepping up enforcement by putting more restrictions on the use of cash. The FIAU will also embark on more public awareness campaigns to inform the public about cash payment restrictions and the ML threat, according to the strategy.

It also said that the FIAU will continue to strengthen its relationship with all competent authorities, both national and foreign, to improve synergies, reduce bureaucracy, and reduce domestic and cross-border crime.

The second pillar aims to provide targeted guidance and feedback to subject persons to improve the quality of suspicious transaction reports (STR). It will conduct analyses to detect trends and risks. It focuses on increasing efficiency by implementing prioritisation based on risk materiality and alignment to national money laundering and financial terrorism risks (ML/FT), the strategy read.

Mangion said that the FIAU cannot deal with 7000 STRs unless there is prioritisation. Moreover, the strategy looks to automate reviewing the STRs rather than doing it manually, he said.

The third pillar will aim to strengthen international cooperation by participating in various international projects, evaluations and other initiatives.

The fourth pillar aims towards monitoring ML/FT risks and analysing national trends and typologies.

The fifth pillar focuses on improving internal communication within the FIAU as the team has increased drastically over the past decade, from 13 people to 135 people, the strategy reads.

Lastly, the sixth pillar will work towards enabling supporting and improving human resources and expertise, systems, and technology.

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