Issue link: https://maltatoday.uberflip.com/i/1374931
10 COMMERCIAL 20.5.2021 DAVID LINDSAY THE recent hefty increase in the Finan- cial Intelligence Analysis Unit's budget- ary allocation in the wake of a number of well-documented financial and money laundering scandals that shook the na- tion's political and economic structures has seen the Unit move, from a reputa- tional standpoint at least, from the figura- tive red and into the black over a relatively short span of time. e changes at the Unit, however, are far from cosmetic and have yielded tangi- ble results on the ground, and businesses dealing with subject persons in terms of anti-money laundering and counter ter- rorism funding are being reached out to now more than ever. MaltaToday earlier this week spoke with FIAU Director Kenneth Farrugia and Deputy Director Alfred Zammit, who both take a certain sense of pride in how their team - after four years of intense overhaul - managed to implement a vast amount of recommendations and action points from the European Banking Au- thority, Moneyval and others. Not only that, but they have also earned a new- found respect from the same internation- al bodies and that had previously been dogging them. Farrugia elaborates, "If you take the Eu- ropean Banking Authority as an example, they are fully aware of the changes made to the FIAU's supervisory and enforce- ment processes, since regular liaison had been maintained while the FIAU was tak- ing action to implement the EBA's recom- mendations in 2018. "e FIAU has overhauled its supervi- sory and enforcement policies and pro- cedures to ensure it has addressed all the recommendations. Today, we are proud to say that we have a fantastic working relationship with the EBA and we value their support and contribution in raising anti-money laundering standards across the EU. "We have been invited by them to par- ticipate in panel discussions and in train- ing events, and we have also participated in projects and working groups led by the EBA on specific anti-money laundering topics." Following the FIAU's actions on the EBA recommendations, Farrugia says, "We now have in place one of the best risk- based supervisory mechanisms in the Eu- ropean Union and beyond - so much so that we are being asked by the authorities of other countries to walk them through the changes we have implemented so they can learn from our experiences and, in turn, improve their own supervisory mechanisms and systems." An operational transformation Indeed, the operational transformation has been significant. Zammit, who joined the FIAU in 2010 when it had just 10 em- ployees, has seen the staff complement grow to over 100 today. "ere were a number of different fac- tors catalysing this change," he explains. "e government has become more sen- sitive to the need to increase resources and to have strong authorities in place to be able to fight financial crime in Malta, and to ensure that all subject persons in are monitored and compliant with their obligations. "We have not only increased our re- sources but we have invested in our peo- ple by making sure they get the training they need. We have invested in tools, in information technology systems, and we have strengthened our policies and pro- cedures across the board. As for the re- sults, all in all, the FIAU has become more effective in carrying out its functions. "is has led to an improved level of compliance by subject persons in Malta, and to an increase in the use of financial intelligence by the Police and other au- thorities in and outside Malta." Businesses reporting more suspicious transactions than ever is, according to Zammit, is yielding tangible results on the ground, with the FIAU receiving and processing more sus- picious reports than ever before. e Unit last year, in fact, received over 5,000 suspicious transaction reports from subject persons in Malta, such banks and remote gaming companies. After analysis, it shared more than 170 analytical reports Transformational overhaul takes the FIAU "We now have in place one of the best risk-based supervisory mechanisms in the European Union and beyond - so much so that we are being asked by the authorities of other countries to walk them through the changes we have implemented so they can learn from our experiences and, in turn, improve their own supervisory mechanisms and systems." - Kenneth Farrugia