This year may not be like any other, Kenneth Farrugia, Director and Secretary of the Financial Intelligence Analysis Unit, warns in the annual report for 2019.

He made an ominous statement: “2020 will not be a walk in the park for the FIAU. Although every year has brought its challenges, 2020 may be like no other.”

He reported that intensive work carried out by the FIAU in 2018 and the first quarter of 2019 is starting to bear fruit, both in terms of the quality of supervisory examinations as well as in the area of enforcement when serious breaches of AML/CFT (anti-money laundering and the combating of financing of terrorism) regulations are uncovered. Administrative penalties during the year exceeded €3.9 million, he said, noting that remedial directives and action plans were put in place.

“These results have strengthened the FIAU’s reputation internationally, and also among national supervisors who consider the FIAU as a point of reference on all AML/CFT matters,” Mr Farrugia commented.

STRs (suspicious transaction reports) submitted to the FIAU continued to increase, exceeding 2,700, up 65 per cent over the previous year. This, he explained, could be attributed to a higher level of awareness among subject persons of their STR obligations, together with improved AML/CFT compliance programmes in the private sector, especially within the remote gaming industry, which accounts for more than half the STRs received.

Peter Grech, the outgoing chairman of the Board of Governors, noted that the FIAU received a record number of STRs in 2019, which he described as “a highly challenging year”, with the organisation rising to the occasion.

Statistics contained in the report show that the STRs received by the FIAU kept increasing since 2010. Last year, 2,778 reports were received, an increase of 65 per cent over 2018. These resulted in 2,446 cases, (+57 per cent over 2018 and +248 per cent over 2017). The FIAU initiated a further 35 cases on its own initiative after receiving information from sources other than subject persons.

New cases subject to an analysis by the FIAU last year numbered 2,481, an increase of 54 per cent over 2018.

There were 24 categories of subject persons who submitted STRs in 2019, four more than in the previous year. Retirement scheme administrators did not file any STRs (three had been submitted in 2018).

Thirteen categories registered an increase in submissions when compared to 2018, the most significant rise being in the remote gaming sector where the number of STRs rose by 745, or 106 per cent, to a total of 1,445. Accounting for 52 per cent of all submissions, the remote gaming sector topped the list, a position traditionally held by credit institutions, which placed second with 35 per cent of the STR submissions received. Credit institutions registered a considerable 33 per cent increase, from 724 to 962 STRs.

Almost a third of gaming STRs were filed by only three companies, and 335 reports made by credit institutions came from the six core domestic banks, down 42 per cent. As in previous years, one core domestic bank filed most of the STRs.

Credit institutions classified as international banks made 588 STRs, a 394.12 per cent increase on the previous year. This was largely attributed to one bank, which submitted 80 per cent of all the reports received from international banks.

Significant increases were observed in reports by auditors, advocates, external accountants, and supervisory authorities. Insurance licensees, investment services licensees, trustees and fiduciaries filed fewer STRs.

The 2,778 STRs submitted involved 4,788 natural and legal persons, up 77 per cent over 2018. Almost three-fourths of them were non-Maltese nationals or foreign-registered companies, confirming the international element the Maltese financial sector is exposed to.

An overwhelming 98 per cent of the reported subjects within the remote gaming industry were foreign nationals and, in the case of credit institutions, 77 per cent of all the persons reported were foreign nationals and just over a fourth of legal persons reported were registered in foreign jurisdictions.

Last year, the FIAU made 13,696 requests for information to about 1,650 entities, including subject persons, foreign similar units, the police, supervisory and competent authorities, as well as government departments and agencies.

Its intelligence analysis section processed 3,585 cases in 2019 and concluded 1,398. Sixty-one cases were communicated to the police for further investigation in view of “reasonable suspicion”. Another 41 so-called ‘spontaneous intelligence reports’ were also forwarded to the police after the FIAU concluded that the information unearthed would be relevant to them.

Fraud remains the most prevalent suspected predicate offence, with 596 such cases being reported. This is followed by tax crimes, suspected terrorism (including terrorist financing), participation in organised criminal groups and racketeering, forgery, and corruption and bribery.

The FIAU made 711 requests for assistance to 94 foreign similar units in 2019, mostly in Europe – mainly the UK, Italy, Germany, and Bulgaria - but also in Asia and the Americas.