The Malta Independent 24 August 2019, Saturday

TMID Editorial: Money laundering - FIAU deserves a chance

Tuesday, 11 June 2019, 09:45 Last update: about 3 months ago

The Financial Intelligence Analysis Unit has received a lot of flak over the past years, however they truly seem to be trying to fix the issues that existed, and improve their capabilities when it comes to the fight against money laundering.

Ever since the Panama Papers were made public, Malta has been at the centre of criticism when it comes to financial safeguards. Scandal after scandal followed, and a number of FIAU reports were also leaked to the press.


Up to this point, it had appeared that the FIAU was doing their job, and the police were failing to do their part in terms of acting upon the intelligence submitted by the FIAU.

The Pilatus bank situation however had changed this. The European Banking Authority and the European Commission had come down hard on the FIAU. In fact, the European Banking Authority issued recommendations addressed to the FIAU after establishing it had breached Union law in relation to its supervision of Pilatus Bank.

The EBA recommendation aims were to remedy particular failings identified by the EBA by encouraging the FIAU to take all the necessary actions to comply with the Anti-Money Laundering and Countering Terrorism Financing Directive (AML/CTF).

Indeed, the FIAU was working on an action plan prior to this, which they presented to the EBA and certain modifications were made. Today, according to the two men at the head of the FIAU (Director Kenneth Farrugia and Deputy Director Alfred Zammit), all but 15 action plan points have been implemented and crossed off the list, while these remaining 15 are of a continuous nature thus cannot be struck off. This shows that the FIAU has worked to fix any shortcoming that were found by the EBA.

Of course, the fight against money laundering is a constantly changing and evolving field, as criminals find new ways to go around existing regulations, thus constant training and improvement of methods is a necessity, and the FIAU must never drop the ball.

That being said, the FIAU needs to be given a chance now, given that it has worked on and is continuing to work on clear changes.

During an interview with The Malta Independent on Sunday, the two FIAU heads also mentioned that the Finance Ministry had also issued a national action plan to implement the national Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Strategy that will help all enforcement and regulatory agencies improve their methodologies. This will hopefully address concerns that the authorities fail to act when prominent public figures are at the centre of scrutiny.

Indeed asked about FIAU reports sent to the police, they highlighted that “around 10 per cent of the reports received by the FIAU result in an analytical report being sent to the police for criminal investigation after the FIAU’s analytical work is concluded. Unfortunately, the number of reports sent to the Police that lead to a prosecution is really low, and the number of prosecutions resulting in convictions is also low.”

The heads said that the conversion rates are really low and it is an issue that is affecting a lot of countries, not just Malta. “However, this is no excuse and although we cannot just blame the Malta police or whoever, the whole system needs to be looked at carefully, including the police, the judicial process and even ourselves – hence the Finance Ministry’s action plan to implement the National AML/CFT Strategy.”

Indeed while the FIAU seems to be showing progress at all turns, the other authorities are still seen by many to be weak and ineffective when it comes to keeping those in power in check. If this is to change, first and foremost the heads of the Malta Police Force need to show that they are not government pawns, as is the view of a number of Maltese.

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