Not business as usual at FIAU

20th April 2021 • News

Fight against money laundering ‘not a sprint but a marathon’


For years, the Financial Intelligence Analysis Unit (FIAU) was rendered toothless. It suffered from a lack of sufficient resources, a weak political direction to prevent financial crime and little interest on the part of the police force to follow up on incidents flagged by the anti-financial crime watchdog.

This seems to be changing. The intensity of investigations by the FIAU has increased by 200 per cent since international scrutiny began three years ago. Hopefully, this marks the end of business as usual, which, in the past few years, meant ineffective scrutiny of suspected money laundering criminals who felt encouraged by the government’s lack of determination to do what is right in the prevention of financial crime.

Financial crime has become one of the top priorities of international law enforcement organisations like MoneyVal, the Council of Europe’s anti-financial crime watchdog. Political sensitivity to the unfairness of all types of financial crime, when many law-abiding citizens suffer from economic stress, has increased. This is mainly thanks to the strong leadership of countries like the US with a low tolerance policy on tax evasion, dealing in narcotics, big-ticket smuggling and financing of terrorism.

There is little doubt that the intensity of the investigations by the FIAU is primarily motivated by the impending decision on whether to grey list Malta as a country with a weak commitment to preventing financial crime. A team of experts is due in Malta from the Financial Action Task Force, of which MoneyVal is an associate member. On the basis of its assessment, the FATF will make the final decision on whether Malta is to be greylisted.

The years when former prime minister Joseph Muscat was in power were characterised by an ingrained culture of impunity that enabled rogue politicians and corrupt businesspeople to plunder taxpayers’ hard-earned money.

MoneyVal’s own assessment is likely to be positive after the considerable changes made in the process of local law enforcement organisations to change the perception that the government was not credible in its fight against financial crime. Muscat’s powerful former chief of staff has, at last, been charged with financial crimes together with some accountants who are accused of being deeply involved in facilitating money laundering by politicians and corrupt businesspeople.

While favourable decisions by international bodies will be most welcome for the local economy, the perception that Malta is not committed enough to fight financial crime is unlikely to go away anytime soon. Many argue that, so far, the FIAU and the police have only uncovered the tip of the iceberg of the money laundering practices in Malta. The country has one of the largest black economies in Europe and this is not just because of petty tax evasion by small operators.

A lack of political will for enforcement of sensible regulations is an endemic weakness that assails any attempt by the government to improve the country’s image. This weakness is evident in the fight against money laundering, as in the enforcement of simple civic regulations.

Enacting good legislation is a crucial first step in proving Malta’s commitment to the rule of law. But the acid test comes when law enforcement in all spheres of public life, especially in preventing financial crime, is intrusive, persistent and consistent.

Bringing those who abuse public trust to justice should not be a sporadic reaction to threats of sanctions but an ingrained commitment to do what is right at all times in the public interest.

The fight against money laundering is not a sprint but a marathon.