Issue link: https://maltatoday.uberflip.com/i/1266179
PHOTO BY JAMES BIANCHI 8 maltatoday | SUNDAY • 5 JULY 2020 INTERVIEW There is serious talk about Malta's possible grey listing from Moneyval. Let's start with the brass tacks: why is it crucial for Malta to avoid this greylisting in terms of doing business? The MFSA is on track and well-prepared for the Moneyval assessment later on this year. A detailed action plan based on the Moneyval recommenda- tions had been drawn up which is being monitored on an ongo- ing basis in collaboration with the National Co-ordinating Committee within the Ministry of Finance. The MFSA team is fully focused on ensuring a pos- itive outcome for the MFSA. A positive Moneyval assessment for Malta is critical in ensur- ing that we remain a trusted international financial centre, maintain our competitiveness and continue growing the sec- tor in a sustainable fashion in the long-term. Grey-listing on the other hand will make it very challenging and difficult to op- erate as a European financial centre and may result in a con- traction of the economy in gen- eral. This may also include the loss of US dollar correspondent banking due to the fact that Malta would be listed as a high- risk jurisdiction by the FATF – where as a result, jurisdic- tions dealing with Malta would need to apply enhanced due diligence checks and other risk mitigation actions which would make international trading and banking more challenging. Having said this, I personally believe that if we stay focused on the national Moneyval ac- tion plan with "all hands-on deck", we should be able to avoid greylisting. Before delving into the chang- es at MFSA under your tenure, what does Malta and specif- ically the MFSA have to do to avoid this grey listing – what are the priorities? The MFSA will continue rais- ing the bar in terms of super- visory and enforcement stand- ards. We are already moving in this direction through the work being carried out by the MF- SA, FIAU and other agencies. A number of actions worth mentioning: [a] the Authority has integrated AML/CFT risks and internal control oversight into its prudential and con- duct supervisory processes; [b] it's updating of the Authority's AML/CFT sectoral risk analy- sis; [c] it has updated the Au- thority's risk based approach to supervision to integrate AML/ CFT risks across its supervi- sory activities. Furthermore, we have invested heavily in capacity building, sourcing of international expertise and the setting up of a financial crime compliance unit. Having said this, the bottom line is all about effectiveness – our ability as a jurisdiction to enforce effec- tively cases relating to money laundering and expedite prose- cutions and asset confiscations. The finance minister said that the FIAU will probably be- come Malta's financial crimes agency and the MFSA could be headed towards a more bolstered investigative and supervisory role. Do you think this is the appropriate course of action? I believe that what the Finance Minister said would be a step in the right direction. The way Malta as a jurisdiction super- vises and investigates financial crime needs a revamp. There are many models we could em- ulate, e.g. the UK and other Eu- ropean jurisdictions. I person- ally agree that the FIAU should become the national financial crime agency with investigative and prosecution powers on top of its current remit. If govern- ment decides that the MFSA assumes the role of an AML/ CFT supervisor for the finan- cial services sector, we are pre- pared to assume that role. We would of course need to ensure we have the necessary capacity to take on board added respon- sibilities. How will the MFSA prepare it- self for this new role? For ex- ample, it only launched a joint investigation on Pilatus Bank with the FIAU late in the day (early 2018). Can it become the investigator which, going by its past record, it never was? Malta's anti-money launder- ing watchdog is presently the FIAU. The MFSA's current re- mit relates solely to prudential and conduct supervision of li- censed entities, including the investigation of misconduct within the financial system. If the government decides to vest the MFSA with addition- al responsibility for the direct supervision of AML/CFT reg- ulations within the financial services sector, the Authority will also be in a position to take action in this regard. MFSA CEO Joseph Cuschieri says the financial regulator is ready to take on a new role that will bolster its investigative and supervisory powers against the problems of financial crime that risk Malta's greylisting by Moneyval 'Malta's financial juridisction Raphael Vassallo rvassallo@mediatoday.com.mt