Maltese anti-money laundering watchdog to improve supervision

The EU Commission requests Maltese anti-money laundering watchdog to step up control of banks

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union

Following the Commission's request, the European Banking Authority (EBA) investigated and concluded that Malta's Financial Intelligence Analysis Unit (FIAU) was breaching Union law and issued a Recommendation on 11 July 2018. It considered that Malta failed to correctly supervise financial institutions and ensure their compliance with anti-money laundering rules.

Building on the recommendation of European Banking Authority and acknowledging the measures adopted by Malta to address the identified shortcomings in the meantime, the European Commission adopted Thursday a formal opinion on the basis of the EBA regulation. The opinion requires the Maltese anti-money laundering supervisor (Financial Intelligence Analysis Unit) to take additional measures to fully comply with its obligation under the fourth Anti-Money Laundering Directive to effectively supervise financial institutions on its territory, including by having an effective sanctioning regime.

"Malta and other countries must have well equipped authorities and fully implemented rules in place. The Commission will use all its powers, including infringement procedures, to close any loopholes in the fight against money laundering,” Commissioner for Justice, Gender Equality and Consumers, Vera Jourova said.

More concretely, the EU Commission calls upon Malta's Financial Intelligence Analysis Unit to take a number of measures, including: methodology improvements to assess money laundering and terrorist financing risks; enhancement of its monitoring and supervisory strategy; adoption of systematic and detailed record-keeping processes for offsite inspections and insurance that the authority is able to react in an appropriate time when a weakness is identified, including by revising its sanctioning procedures.

“We need to ensure that money laundering and terrorist financing risks in the financial sector are properly assessed and mitigated by our supervisory authorities. The European Banking Authority contributes to a harmonised application of anti-money laundering supervisory rules. Our September proposal will equip the EBA with the additional instruments and resources needed to ensure effective cooperation and convergence of supervisory standards. I count on the European Parliament and Council's cooperation to turn this proposal into legislation rapidly,” Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union also noted.

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