EC requests Maltese anti-money laundering watchdog to step up supervision of banks

Photo © Maksym Yemelyanov – Fotolia

(BRUSSELS) – The EU Commission requested the Maltese anti-money laundering supervisor Thursday to take additional measures to fully comply with its obligations under the fourth Anti-Money Laundering Directive.

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.

The Commission’s formal 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.

More concretely, the EU executive calls upon Malta’s Financial Intelligence Analysis Unit to take a number of measures, which include:

  • Improving its methodology to assess money laundering and terrorist financing risks;
  • Enhancing its monitoring and supervisory strategy by aligning resources with the risk of money laundering posed by certain institutions;
  • Ensuring that the authority is able to react in an appropriate time when a weakness is identified, including by revising its sanctioning procedures;
  • Ensuring that its decision-making is properly reasoned and documented;
  • Adopting systematic and detailed record-keeping processes for offsite inspections.

First Vice-President Frans Timmermans said: “To protect the security of Europeans and ensure a safe, reliable financial system, every authority in every Member State must uphold EU money-laundering rules in full. We remain vigilant and ready to act so that any breach is swiftly remedied and that better supervisory practice ensures it does not happen again.”

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “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.”

Malta’s Financial Intelligence Analysis Unit now has ten working days upon receipt of the opinion to inform the Commission and the European Banking Authority of the measures it intends to take to comply with their obligations.

Commission opinion addressed to the Financial Intelligence Analysis Unit of Malta

Anti-money laundering and counter terrorist financing

EBA Recommendation

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