Malta is working hard to implement all the Monveyval recommendations, the Minister for Finance and Financial Services, Edward Scicluna, underscored, refusing to commit on whether he thought Malta would pass the test, stressing that this was not “an exam to pass, and then to forget about the next day” but a fundamental exercise for the long-term.

“A lot of boxes, representing our tasks, are being crossed off, so we’re moving in the right direction. We just hope it will be enough to convince them [the Financial Action Task Force] that Malta has made the effort,” Prof. Scicluna said, while stressing that change must come from all stakeholders, both public and private. 

“We have a National Coordinating Committee based here which is doing all the chasing and monitoring. They’re keeping a tab,” he said. “It’s in Malta’s interest to look after its reputation.” He also stressed that, while Malta did not ask for any extensions, the deadline was pushed by four months as a result of COVID-19. 

To meet the deadline, he pointed to a number of changes being implemented, which, he added, had been a long time coming. To quote an example, he pointed to amendments to the legislation surrounding tax evasion regulating Malta’s punitive measures, saying that, previously, the only recourse was to punish tax evaders through administrative action – that is penalties and fines – rather than court action. 

“Moneyval pointed this flaw out to us, although our own consultants – whom we had contracted before the Moneyval report – had already highlighted this weakness. So, one of the changes we’ll be implementing is amending the legislation in such a manner so that we are able to open court cases to punish tax evasion where this is relevant,” the Minister said. 

However, Prof. Scicluna reserved his most urgent call to action for the private sector, saying that the general public seemed to think that the authorities were solely responsible for the implementation of the Moneyval recommendations. However, this was not only an issue for entities like the Financial Intelligence Analysis Unit (FIAU) or the Malta Financial Services Authority (MFSA), he explained, but for “all sectors of the economy”, with the hardest hit being the private sector.

Specifying, he pointed to the responsibility of audit and legal firms – that are often company intermediaries – to flag up suspicious behaviour and said that “they’re representing companies; they do the due diligence, so the onus is on them. They need to be held accountable.” He admitted that this was a tricky situation for these firms to be in, but he underlined the need to ask relevant questions to clients, and for trade associations to aid in regulating. 

“It’s very hard because these are your clients, and you’re professionally bound and information is confidential,” he said, also underlining the risks he saw with non-governmental organisations (NGOs) and the real estate sector, where “you could bury money in a building, for instance”. 

Indeed, to mitigate some of these risks, the authorities were in the process of setting up systems which would see company information shared across public entities. “I’m blaming the structure, and there will be a sharing of information and registers. The Commissioner for Tax, for instance, is going to have a central depository of all the information and accounts in Malta, and the FIAU will have access to it,” he said, adding that “these are things which hadn’t come onto our radar before, but now we realise that the bar has been raised. Everyone has to up their game.”