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11 COMMERCIAL 20.5.2021 with the Police in Malta, and over 4,000 intelligence reports with its foreign coun- terparts. "Also," Zammit adds, "the FIAU has considerably increased its supervisory coverage by carrying out onsite or virtual examinations of subject persons, particu- larly in higher-risk sectors. "In fact, last year more than 200 exami- nations were conducted using the FIAU's recently overhauled risk-based approach. is, in turn, has resulted in more en- forcement actions taken by the FIAU, such as the imposition of penalties or re- quiring subject persons to remediate their shortcomings within a specified period of time." Stakeholders embracing compliance culture e marked surge in STRs, the in- creased compliance levels and the overall change being noted in the compliance culture among subject persons, Farrugia explains, "are not only the result of the FIAU's efforts, but it is also because these considerations are being embraced more and more by all the stakeholders. "e subject persons themselves are in- vesting heavily and are beefing up their resources and compliance systems. ey are ensuring they are performing all the checks required, which is also triggering an increase in STRs. e more checks be- ing carried out by the subject persons, the more suspicious reports are submitted, and this has been seen across all sectors. But the size and structure of Malta's busi- ness activity, and a seemingly constant entrepreneurial spirit, present advantages and challenges alike for the FIAU. As Zammit notes, "Malta's economy and subject persons are dynamic and quick to respond to business opportunities. One of our main challenges as supervisors and as an intelligence agency is to ensure we keep pace and abreast with the changes taking place in the sectors that we super- vise, such as the developments of new niche markets, products or services." "Actually, the size of the country pre- sents several inherent advantages. For example, the number of subject persons in Malta, which presently stands at just under 2,500, is manageable. "We are well-positioned to reach out, communicate and assist subject persons to understand their obligations and how to implement them in practice. "e physical size of the country and our institutional framework also greatly facilitates cooperation and coordination among the competent authorities of Mal- ta both on policy and operational mat- ters." Authorities 'conducting duties and taking action' While businesses dealing with subject persons and suspicious transactions are undoubtedly well-versed in the work of the FIAU, it hasn't always been the case with the public at large. Farrugia adds, "We are seeing that peo- ple are more aware of the implications of money laundering and of the FIAU's work. If you were to have asked about awareness of the FIAU six years ago, a lot of people would not have known anything about the Unit. But today, this is no longer the case and there's a lot more awareness of who we are and what we do. "Also, from the perspectives of the au- thorities concerned – such as us at the FIAU, the Malta Financial Services Au- thority, the Malta Gaming Authority, the Police, Attorney General's office, and the Sanctions Monitoring Board – they are conducting their duties thoroughly and are taking action. "Coupled with that, there has been in- creased attention, at an international lev- el, on the topic of money laundering and financing of terrorism. Everyone is taking the topic more seriously, as it is becoming increasingly clear how widespread and global the money laundering phenome- non is." Educational campaign on the €10,000 cash limit law e newly-legislated cash restriction law, which imposes a €10,000 cash limit on the payment of goods, will undoubt- edly have an effect on businesses dealing in high-end goods, and to this end the FIAU is about to embark on a campaign to educate Malta's cash-intensive econo- my about the new law. Zammit explains, "Speaking of the cash restriction law, there are different reasons why it was implemented. Not only was it one of Moneyval's recommendations to consider introducing a mechanism to ad- dress the money laundering risks of use of cash in Malta, but Malta's cash-intensive economy meant that the country needs to ensure that any associated money laun- dering risks are adequately mitigated. "As such, having this law in place simul- taneously helps in the fight against tax evasion and money laundering in cases where proceeds of crime in the form of cash need to laundered. "is law itself should serve as a deter- rent and reduce the excessive use of cash in Malta now that, as a first step, the law is in place. As a second step, the FIAU shall be embarking on an educational and an awareness raising campaign to inform the public of the recently enacted law, what it means to them and what the repercus- sions could be if one were to break the law. e FIAU is resourcing its newly set up Cash Restriction Section that will be responsible for enforcing this law on the ground." FIAU out of the red and into the black "Malta's economy and subject persons are dynamic and quick to respond to business opportunities. One of our main challenges as supervisors and as an intelligence agency is to ensure we keep pace and abreast with the changes taking place in the sectors that we supervise, such as the developments of new niche markets, products or services." - Alfred Zammit

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