FATF – “Grey-list” decision depicts Malta’s Financial Future

Malta’s financial regulator has highlighted its work to crank up enforcement and supervision of anti-money laundering provisions.

However, member states of the global anti-money laundering FATF have voted to add Malta to its grey list shortly after 2.30pm on Wednesday afternoon.

The Vote Surrounding Malta

Malta has become the first European Union member state to be grey-listed by the international Financial Action Task Force.

The Financial Action Task Force (FATF) has voted to grey list Malta in a vote taken during a plenary session this afternoon 23rd June 2021.

Reasoning behind Grey-Listing

The FATF’s decision comes despite Malta’s adherence to a 18 month  Moneyval assessment in which it achieved a high compliance rate on various recommendations. This  decision could have serious long- term negative repercussions on the country’s economy.

However, in recent years Malta has fallen to poor and beaching activities over its AML compliance and Financial Crime issues varying from

1. The scale of citizen to high net-wroth individuals
2. It financial intelligence analysis unit
3. And, the creation of a offshore firm of the Prime Ministers right-hand man

What Will Happen to Maltas Financial Future

The Financial Action Task Force, the leading global anti-money-laundering watchdog has now demeaned Malta as a  “untrustworthy jurisdictions” under its “Grey-List”

As a result,  it is known that ending up on the grey list could negatively impact the country with primarily scope over the:

1. Bank de-risking – which refers to the implementation of stronger compliance and regulation over “high-risk” current and potential customers.
2. Investor Confidence –  lead investors to move resources out of the island and reduce their exposure to the country.
3. Foreign Investments – Malta will see also, see a decline in payments from other countries with weak anti-money laundering institutions while it is on the list.

What is The Financial Action Task Force

The Financial Action Task Force or the FATF is an inter-governmental decision making body. It was created in 1989 during the G7 Summit in Paris in response to the global concern over money laundering. Its current president is Marcus Pleyer as of the 1st of July 2020.

The policy body works towards bringing about a global legislative and regulatory revolution to money laundering. Additionally, since the occurrence of rising international terrorism such as 9/11 terror attacks in USA, the FATF has expanded to include such actions of terror finance under its governance.