Issue link: https://maltatoday.uberflip.com/i/1278887
maltatoday | SUNDAY • 16 AUGUST 2020 13 COMMERCIAL financial system: the MLRO's role wide-ranging. This would include compliance and legal risks in the form of operational restrictions and admin- istrative penalties or fines, as well as reputational damage. The latter would not be limited to the company in question but would al- so have repercussions on the financial sector and ultimately to the jurisdic- tion as a whole. MLROs are personally liable if they contribute to or cause a Subject Person to be in breach of its AML/CFT obligations either through an act or omission. The MLRO may be subject to an administrative penalty as high as Euro 250,000. Anyone found to be complicit in money-laundering could face a prison sentence of up to 18 years. What are the difficulties one can come across in this role? What problems can occur, especially where wrongdoing is involved? Is it likely for certain third par- ties to try to pressure an MLRO into ignor- ing any red flags, for instance, or would this be a very unlikely occurrence? It is a legal requirement that ML- ROs must occupy a senior position within the institution, having access to all information and sufficient com- mand to influence the institution to implement the necessary AML/CFT measures, policies, controls and pro- cedures. This would empower MLROs to investigate any internal reports, corroborate information and provide relevant information to the FIAU for further analysis. Additionally, it is also important that MLROs have enough clout to convince their Board of Di- rectors to invest in the necessary sys- tems and controls to meet AML/CFT requirements. MLROs should have systems in place for the operator to identify red flags at all stages of interaction with clients. The MLRO's ability to assess red flags independently, challenge decisions taken by other functions or stake- holders and freely determine whether suspicion subsists, is a key element in having an effective AML/CFT struc- ture. Would you say that the position of a Mon- ey Laundering Reporting Officer has be- come more crucial than ever in this day and age? The MLRO is on the frontline in combatting financial crime at the lev- el of the financial services operators. The robustness of systems and expert decisions taken by the MLRO are fun- damental in deterring criminals from abusing the financial system by pre- venting criminal access and detecting suspicious activity. The MLRO has a very important role to play in this regard and companies should ensure that individuals engaged as MLROs have the necessary expertise and pro- pensity for the role. Applying for the role should be taken with great re- sponsibility and MLROs should not over-stretch themselves with acting as an MLRO in more than one entity. As an expert in this field, do you believe there has been an increase in the effec- tiveness of Malta's ability to counter at- tempts of money laundering within our shores? The MFSA, acting together with the AML Competent Authority, is now much more intrusive than it has ever been. We have seen significant invest- ment in human and systems resources to carry out supervision with greater effectiveness. There is enhanced training to all su- pervisory staff and deficiencies within credit and other financial institutions are recognised earlier with rapid in- tervention. The outreach of supervision to com- bat money laundering and counter the funding of terrorism has changed massively in the recent past. We are supervising an incremental number of institutions year on year with discipli- nary action being taken where there are material shortfalls. We are experiencing licence holders voluntarily withdrawing from the in- dustry and we are acting where there is an ineffective anti-financial crime framework. We continue to root out bad actors and attract sound business to Malta. *Subject Person: Entities which fall under the requirements of the AMLCFT regulations.