The Maltese government has reportedly received a poor grade in its first test by Moneyval, the Council of Europe’s committee on the evaluation of money laundering and the financing of terrorism.
Sources quoted by The Sunday Times of Malta said Malta failed its initial test of it actions and preparedness in complying with anti-money laundering regulations.
It should be noted that the country still has a chance to remedy this failure, with sources also saying that “countries often fail in the draft report and then manage to turn it around for the final document, so I wouldn’t be surprised if the country’s final score is better than this”.
The final report will be published in July.
Moneyval, which conducted an investigation in November 2018, are claimed to have found no major problems on their visit after finding Malta to be compliant. However, it did find issue with the way the laws were applied by the Police and the Malta Financial Services Authority (MFSA).
For example, sources have said that Malta did not receive a ‘high’ grade for any of the 11 sections that grades effectiveness, with only “just one or two” being found to be “substantial”.
It was also claimed that the government had spent “millions” in consultancy fees for the analysis.
“In one area alone – risk management – the government spent some €800,000 in consultancy and advice, but we still failed that section,” the source said.
Maltese government officials will now travel to Strasbourg to face a grilling from Council of Europe experts, with a final document expected to be published in July.
The country will then be given recommendations that will be implemented within a year.
Should Malta receive a damning grading from the Council of Europe, the country could potentially be placed upon a blacklist.
Meetings between the CoE and the government over the issues have allegedly already taken place.
A spokesperson from the Office of the Prime Minister insisted that the issues are flagged within a draft report, adding that the publication of its contents was unethical and interfered with its own due process.
“Moneyval aims to improve the capacities of national authorities to fight money laundering and the financing of terrorism more effectively. Let us allow our institutions undergo this exercise without interference,” the spokesperson said.