The European Commission has asked Maltese authorities to increase supervision of banks in the region to ensure their compliance with the fourth Anti-Money Laundering Directive.
The move follows a probe by the European Banking Authority (EBA), which revealed that Malta’s Financial Intelligence Analysis Unit (FIAU) was flouting Union law and was not monitoring financial institutions effectively.
In order to address the gaps, the Commission has asked FIAU to enhance its methodology for evaluating risks related to money laundering and terrorist financing.
It also demanded a revision in the sanctioning procedures. Moreover, it urged authorities to embrace a systematic record-keeping process for offsite inspections and properly document the decision-making process.
Commissioner for justice, gender equality and consumers Vera Jourová said: “Europe has the strongest anti-money laundering rules in the world. But they need to be enforced with the same high standards across the EU to avoid creating any weak link.
“Malta and other countries must have well equipped authorities and fully implemented rules in place. The Commission will use all its powers, including infringement procedures, to close any loopholes in the fight against money laundering.”
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The directive comes shortly after the licence revocation of Malta’s Pilatus Bank, due to alleged money laundering.
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.”