FIAU issued fines totalling €12.4 million in 2021, notes courts overruling penalties

The Financial Intelligence Analysis Unit (FIAU) issued fines totalling €12.4 million in 2021, its annual report shows.

The report was published on Tuesday, with Director Kenneth Farrugia highlighting the work done to implement the Moneyval recommendations as well as address the three main issues highlighted in the Financial Action Task Force (FATF) greylisting report.

The FATF had greylisted Malta in 2021 after the country failed to achieve a satisfactory score on three key areas out of 58. These three areas dealt with the beneficial ownership of companies and their non-compliance as well as financial analysis when it comes to tax offences and money laundering related offences. Malta was taken off the grey list last week.

Despite the outcome of the June 2021 FATF plenary, the FIAU said that the year was still a successful one, since significant improvements were made with regards to the Anti-Money Laundering framework in Malta.

Throughout 2021, the FIAU received over 7,000 suspicious report complaints, which is an increase of over 2,000 from 2020. The annual report also shares that the FIAU has shared 8,443 intelligence reports to both national and international authorities, this is an 86%increase on 2020.

Another significant difference from 2020 is the fact that the FIAU are now better equipped technology wise to improve their efficiency when it comes to assessing Money Laundering reports, while also helping to improve the Centralised Bank Account Register functionality.

The advancements in the FIAU did not stop there. As they increased their staff from 98 people in 2020, the headcount increased to around 130 people currently. This was done to constantly train and prepare for the ever-changing threat posed by money laundering, be it in intelligence, supervision and enforcement.

“The FIAU’s commitment to continually offer guidance to businesses and entities continued despite the pandemic.”

Although the FIAU throughout 2021 fined a total of €12.4 million, the main aim of the authority was and still is to help businesses and entities by devising plans for them to become compliant with the standards set by the authority.

“The FIAU is a key player in combatting crime and protecting Malta’s financial system and reputation. A financial system free from criminal abuse and a good reputation are critical to the country’s economy and encourage clean foreign investment,” the document read.

Malta had entered the FATF greylist due to three failures in the effectiveness of anti-money laundering policies, processes and laws.

This area was judged on 11 immediate outcome sections and Malta failed to obtain a pass rate in three of these. Therefore work had to be done by the FIAU primarily in the areas of licensing anti-money laundering institutions, investigating money laundering offences as well as a proper framework in the confiscation of proceeds of crime.

After a year of work, the FIAU achieved an achievable pass in the licensing of anti-money laundering institutions while a partly achieved pass was given to the other two criteria. This evidently was enough to get Malta off of the greylist, the FIAU said.

The process involved an action plan provided by the FATF as well as statistical data received by the Maltese authorities and face-to-face meetings with the board.

Court overruling FIAU fines

The FIAU is also tasked with handing out fines to businesses and entities that do not comply with certain guidelines of compliance as stated by the European Union.

Throughout the previous weeks, news hit that certain entities were not paying their full fine and taking the decisions to court, having their fine reduced substantially.

FIAU director Kenneth Farrugia said that although the authority fully respects the decisions of the courts, “the fines are not being respected and the amount to be paid is similar to what the FIAU used to give years ago before the international financial institutions warned them for being too low.”

Farrugia went on to say that “the FIAU has a mechanism in place which was approved by the relevant international authorities which calculates the fines given to the entities in question. However, we still respect the decisions of the court.”