EC gets cross with Malta over AML supervision
The European Commission (EC) wants the Maltese anti-money laundering (AML) supervisor to bring its A-game when checking out banks and shady activities.
Amidst the polite platitudes that the EC loves, it did remind Malta’s Financial Intelligence Analysis Unit (FIAU) about its obligations under the fourth Anti-Money Laundering Directive.
Oi Malta! Sort it out!
Following the Commission’s request, the European Banking Authority (EBA) investigated and concluded that the 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 AML rules.
As reported in September, the EC gave the EBA more powers to tackle AML and terrorist financing threats.
In the latest development, the EC “adopted today [8 November] a formal opinion on the basis of the EBA regulation”.
EC first VP Frans Timmermans says: “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.”
More concretely, the FIAU needs to take a number of measures.
These include improving its methodology to assess money laundering and terrorist financing; enhancing its monitoring and supervisory strategy; ensuring its decision-making is properly reasoned and documented; and adopting systematic and detailed record-keeping processes for offsite inspections.
In this case, the Commission used for the first time its power to request the EBA to investigate potential breaches of Union law by an authority of a Member State.
The Commission has since also requested the EBA to conduct an enquiry on the competent authorities in Latvia, Denmark and Estonia, where recent cases have raised concerns about the effective enforcement of the AML rules by national authorities. We look forward to seeing what comes up.
The FIAU has ten working days to reveals its measures to comply with its obligations.
