by , on Jun 30, 2021 02:16:02 PM

The Financial Intelligence Analysis Unit (‘FIAU’) has published an update on its achievements between January and July of 2020, as well as its targets for the coming months. The salient points are outlined below.

Legislative Changes

The FIAU sought to strengthen the Anti-Money Laundering/Combating the Financing of Terrorism (‘AML/CFT’) framework in Malta, which included the transposition of the 5^th Anti-Money Laundering Directive (5AMLD) into Maltese law through amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations (‘PMLFTR’) which came into force in February 2020. Further amendments were made to the PMLFTR to address inadequacies noted by Moneyval during the 5^th Round Mutual Evaluation of Malta.

In April 2020, plans to introduce legislation regulating cash restriction were initiated in light of the introduction of cash restriction policies in other EU Member States to address the risks associated with the use of cash for money laundering and terrorism funding. The FIAU will also be setting up an operational team to oversee the implementation and enforcement of such law and to promote educational campaigns on the use of cash restrictions.

The FIAU has also drafted legislation supporting the launch of the Centralised Bank Account Registry (‘CBAR’). The CBAR is a database listing all IBAN accounts issued by Maltese banks which is accessible by tax authorities, law enforcement and other bodies, as required under the 5AMLD. The final version of the regulations is expected to be presented to the Minister for Finance and Financial Services in the coming days.

Guidance and Outreach

Throughout the past months, the FIAU has issued six guidance documents addressed to a variety of parties and sectors, including VFA agents and VFA service providers, real estate agents, notaries and the gaming sector in order to provide further instruction and information on AML/CFT obligations and measures. The guidance documents on the Funding of Terrorism and COVID-19: Remaining Vigilant Against a Changing Criminal Landscape are applicable to all subject persons.

The FIAU has also ensured to maintain interaction with subject persons through webinars and delivering lectures in AML/CFT to students at the University of Malta studying Accounting, Law and Criminology. The Unit has also been able to gain a better understanding of the obstacles to suspicious transaction reporting across different industries through questionnaires on subject persons.

Supervision, Risk and Enforcement

The FIAU carried on its supervisory and enforcement role despite the upheaval caused by the COVID-19 pandemic through investment in IT and training, which allowed for a seamless shift to remote-working. The FIAU carried out more than 140 examinations together with the Malta Financial Services Authority and the Malta Gaming Authority on a variety of entities. Despite the extension of the submission deadline due to COVID-19, only 5% of Maltese subject persons failed to submit their Risk Evaluation Questionnaire (‘REQ’) within the deadline. Through the implementation of the Business Intelligence (‘BI’) tool, the FIAU may analyse data to better identify the risks which a subject person is exposed to, thus strengthening the FIAU’s supervisory role.

The Compliance Monitoring Committee successfully upheld its administrative role and took the following enforcement measures:

• Issued 9 remediation directives on subject persons;
• Issued 5 administrative penalties on subject persons for failures to meet their AML/CFT obligations amounting to €568,373;
• Issued 115 administrative penalties for breaches of the obligation to submit the 2019 REQ amounting to €529,950; and
• Issued 30 administrative penalties on subject persons for failing to reply to requests for information in a timely manner amounting to €304,500.

Intelligence Analysis

The FIAU received 2200 Suspicious Transactions Reports (‘STRs’), in comparison to the 1448 STRs received during the same period in 2019, in line with Moneyval’s recommendation to increase the number of STRs. It is anticipated that such reports will increase further through the introduction of goAML in June 2020. This tool allows for the automatic upload of STRs which will effectively reduce the time necessary to manually input data, thereby facilitating the exchange of information between the relevant authorities.

The FIAU also made around 9000 requests for information to financial institutions and shared more than 1800 Spontaneous Intelligence Reports with its foreign counterparts. 58 intelligence reports were also sent to the police and 19 communications providing additional information in relation to previous disseminations, with the average time taken for such analyses reduced to 3 months in line with Moneyval’s recommendations.

Collaboration

The FIAU has successfully signed Memorandums of Understanding with the Central Bank of Malta, the Malta Accountancy Board and the MGA to facilitate the implementation of AML/CFT regulation through the sharing of resources and the training of officials. Such collaboration allows the FIAU to conduct joint investigations thereby increasing protection against financial crime.

The FIAU has also contributed to the EU funded project on New Methods to Prevent, Investigate and Mitigate Corruption and TAX Crimes in the EU (‘PROTAX’) by drafting and reviewing reports, replying to questionnaires and monthly Consortium meetings.

The FIAU will be taking on a number of initiatives to continue strengthening its role. These include the setting up of the Central Bank Account Registry (‘CBAR’) which is a system storing information on IBAN identifiable accounts, Safety Deposit Boxes and Safe-Custody Services, and will go live in the coming weeks. The FIAU will also oversee the introduction of cash restriction policies which will allow for better monitoring of the use of cash, thereby increasing the Unit’s responsibilities to also include monitoring compliance with the law.