21st June 2021

The FIAU has published its Annual Report for 2021.  In his welcome note Director Kenneth Farrugia said that 2021 was another challenging year. The first six months involved intensive work to continue to implement all the recommendations made by MONEYVAL. Nevertheless, during the June plenary, the FATF decided to grey list Malta on the basis that three effectiveness issues out of the original 58 had not been fully addressed. These concerned the identification of accurate beneficial ownership information and the imposition of effective, proportionate, and dissuasive sanctions in cases of non-compliance; and the need for increased focus of FIAU financial analysis on serious tax offences and related money laundering and the enhanced use of FIAU intelligence in support of the detection and investigation of these offences

The second part of the year therefore saw extensive work being carried out to implement the action plan agreed with the FATF to increase effectiveness in the three areas of concern and to put Malta firmly on track to be considered for delisting within the shortest period of time possible. Despite the FATF June plenary outcome, 2021 was nevertheless considered a successful year, with a number of significant achievements and improvements having taken place to further improve Malta’s AML/CFT framework.

In 2021, 7,218 suspicious reports were filed by subject persons (SPs), marking an increase of over 2,000 STRs over 2020. The Unit shared 8,443 intelligence reports with both national and international competent authorities, and with counterpart FIUs. This is an 86% increase on 2020. The FIAU submitted over 70 analytical reports to the police indicating a reasonable suspicion of ML/FT and over 400 other disseminations consisting of additional intelligence reports and spontaneous intelligence reports. These results clearly show that although 2021 was a very challenging year, the team at the FIAU continued to work relentlessly to improve its operations.

Improvements to the FIAU’s technological tools were also made. These included ongoing updates and further development to the FIAU’s IT operating systems for submission of suspicious reports and for the assessment of subject person ML/FT risk. Further development was also carried out to improve the Centralised Bank Account Register functionality.

Increased investment in training of staff was also undertaken. This is driven by the need to constantly update and improve expertise, due to the rapid and ever-changing nature and challenges posed by money laundering and funding of terrorism, with new trends and typologies continuously emerging. These changes present challenges on all levels of operations, be it intelligence, supervision and enforcement. The FIAU constantly strives to keep abreast of developments and updates its practices and operations as deemed necessary.

2021 saw also an increase in staff compliment, with ongoing recruitment across various sections. New teams and roles were introduced to continue to strengthen the effectives of the FIAU. The headcount increased from 98 at the end of 2020 to 115 at the end of 2021. The largest increase was seen within the Supervision Section, as ongoing and effective supervision is critical to the fight against ML/FT. This was followed by the increase in intelligence analysts to cope with the increasing workload.

In line with FATF’s expectations, the Supervision Section, apart from engaging in the regular supervisory cycle, engaged in a specific supervisory exercise, in relation to beneficial ownership obligations. Between September and December 2021, 40 thematic examinations focusing on these obligations were carried out to assess compliance and the risks involved. These examinations were carried out on Company Service Providers (CSPs) providing services to Maltese registered entities and focused on various obligations.

Apart from intelligence analysis and supervision, the FIAU’s role includes also the enforcement of compliance and the provision of guidance and outreach to SPs. The Enforcement Section increased engagement with SPs undergoing enforcement actions, and in addition to the imposition of financial penalties where necessary, it also required numerous remedial actions and guided and supported SPs to improve their AML/CFT controls.

The Unit’s commitment to offer guidance to SPs also continued despite the pandemic. The team published 5 guidance documents, organised its own training events (reaching 2,689 attendees) and supported third party training events on a number of occasions (reaching 3,743 attendees). While most training took place via virtual means, face-to-face training sessions resumed immediately upon the lifting of some restrictions. The FIAU is a key player in combating crime and protecting Malta’s financial system and reputation.  A financial system free from criminal abuse and a good reputation are critical to the country’s economy and encourage clean foreign investment. The FIAU however cannot achieve this alone and relies on the cooperation and support of numerous other entities and the SPs it supervises. It is positive to note that all stakeholders have shown increased commitment to the fight against ML/FT. Everyone must be committed to this goal. The FIAU 2021 Annual Report outlines the enormous work carried out by the Unit during the year.