The Financial Intelligence Analysis Unit (FIAU) has published an “Enforcement Factsheet: Common observations across sectors subject to AML/CFT Supervision”. This Publication sheds light on findings and observations that were identified in respect of the more salient AML/CFT obligations outlined in the Prevention of Money Laundering and the Financing of Terrorism Regulations and the FIAU’s Implementing Procedures, with the aim of providing insight to subject persons on the types of deficiencies that are being encountered by the FIAU Supervisory Function.
The FIAU has significantly increased its supervisory coverage and, consequently, has been taking more meaningful enforcement action including heftier pecuniary sanctions and the imposition of numerous remediation directives. These initiatives, coupled with more regular and qualitative guidance, as well as increased investment by subject persons in AML/CFT resources, have notably improved the level of compliance with AML/CFT obligations in Malta.
The Publication, which can be accessed here, aims at providing more insights on ML/CFT compliance trends with an analysis on the enforcement actions undertaken by the FIAU in 2019 and 2020. The Publication is also intended to assist subject persons to further align their internal AML/CFT controls with the legal obligations and the FIAU’s expectations, while ensuring that the controls they have in place are adequate and robust to protect their services, and ultimately, the Maltese economy from being abused for money laundering/funding of terrorism (ML/FT) purposes.
The most common finding noted across all sectors relates to the appreciation of risk, both at the institutional level and at the customer level. The FIAU notes that, while understanding risks is essential, the transposition of such understanding into effective methodologies to determine the risk exposure both at the business and customer level is crucial.
Other common findings relate to the requirement to have in place comprehensive customer risk profiles, transaction monitoring procedures and the need to consider occasional transactions within the context of all that is known about the customer, including past activity.
Particular reference is made to robust AML/CFT controls which are a must to protect the reputation of the subject person and the local jurisdiction. Effective measures to monitor customer relationships and transactions that take place through business relationships are indispensable. Should such controls be absent, the possibility that the local economy will be abused for ML/FT purposes will increase with financial and economic consequences for all concerned.
The FIAU’s publication should be regarded as an exercise intended to contribute to subject persons’ knowledge on the proper implementation of AML/CFT requirements.
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