The Financial Action Task Force confirmed Malta was now under increased monitoring and was working with the country to address ‘strategic deficiencies’ in its regime to counter money laundering, terrorist financing and proliferation financing.
Malta is the first European Union country to be added to the FATF grey list.
At the same time, Haiti, the Philippines and South Sudan were also added.
Responding to the news, the Guernsey Financial Services Commission said the decision by the FATF to put Malta on the list reinforced the importance to the Bailiwick of ensuring compliance with international standards. It also emphasised the potential impact of a poor evaluation for any jurisdiction.
‘Decisions on which jurisdictions to do business with are a matter for individual firms, except where in very serious cases the FATF calls upon countries to apply counter-measures, as in the case of Iran and North Korea,’ added the commission.
‘The commission expects firms to have regard to public statements issued by the FATF on jurisdictions which are subject to increased monitoring from the FATF when assessing the money laundering and terrorist financing risks posed by customer/business relationships connected to those jurisdictions.’
Earlier this year, the Cayman Islands were also taken to task by the FATF, with the international body saying it was working to address strategic deficiencies within agreed timeframes and subject to extra checks.
The GFSC went on to amend its handbook on countering financial crime and terrorist financing to reflect the FATF’s decision on the Cayman Islands.
That included the removal of the Cayman Islands from the list of equivalent jurisdictions, firms having to review business relationships where the Caribbean jurisdiction was a relevant risk factor and taking mitigation measures where required.
There might also be ‘exceptional circumstances’ where the amended requirements could not be completed, with the GFSC warning that specified businesses should ‘terminate’ the business relationship where customer due diligence could not ultimately be completed.