The financial services sector in Malta has grown exponentially over the past 15 years. Malta’s economy is one of the most dynamic in the EU having maintained steady growth over recent years and has continued to outperform that of many of its peers.

Rapid economic growth and increase in international investment could leave Malta more vulnerable to financial crime and money laundering.

The National Risk Assessment (NRA) which was published early last year has identified the illegal activities that generate most proceeds and threaten the local economy. The NRA also names the sectors that are most vulnerable to being abused or misused for financial crime.

As one would expect, banks topped the list as being the most vulnerable to money laundering and funding of terrorism. The large volume of transactions processed daily by banks, coupled with a vast array of products to choose from, make banks attractive to criminals to launder their ill-gotten gains.

The Maltese economy is a cash-intensive economy where cash remains the preferred mode of payment in various sectors including the real estate and luxury goods sectors. Such a situation makes banks in Malta even more susceptible to money laundering. The NRA identified tax evasion, local criminal groups and drug trafficking as the biggest threats of money laundering of domestic proceeds of crime.

Being an international financial services hub, Malta provides a platform for transactions and operations of a diverse nature to take place through its financial systems. This makes the financial services industry in Malta also vulnerable to money laundering of foreign proceeds of crime.

Given that banks play such a pivotal role in the world of financial crime, it is important that they constantly look for new ways to fight money launderers, by having in place a robust anti-money laundering regime. Nowadays banks proactively monitor their customers and transactions channelled daily through various systems, to prevent money laundering and the abuse of their products and services by criminals. 

Financial crime threatens the safety of our society, the integrity of our financial system and the stability of our economy

Banks have a legal obligation to take all the necessary action to prevent money laundering from occurring through their products, detect financial crime if it happens, and report it immediately to competent authorities. Local banks, like their foreign counterparts, have invested heavily in both technological and human resources, in adopting a sound anti-money laundering programme to control inherent risk associated with money laundering and funding of terrorism.

Financial crime threatens the safety of our society, the integrity of our financial system and the stability of our economy.

Money laundering has a corrosive effect on the country’s economy and social well-being. It also erodes the financial sector and tarnishes Malta’s reputation as a reliable financial centre of excellence. Successfully laundering money means that criminal activity does pay off.

In its fight against money laundering, Bank of Valletta continuously invests substantial resources to meliorate and strengthen its AML programmes. As a leading financial institution in Malta, BOV fully understands the importance of following international best practices and standards in a bid to protect its customers, employees and the society in general from the adverse consequences of money laundering.

Marisa Frendo, MICA, is the Money Laundering Reporting Officer of Bank of Valletta plc. She is a professional banker, with over 30 years of experience in retail banking and SMEs on anti-money laundering and counter ginancing of terrorism.

Issued by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta plc is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the banking Act (Cap.371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).

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