A critical evaluation of initiatives counteracting money laundering and terrorism financing in the financial services industry

Abstract

Money laundering (ML) and financing of terrorism (FOT) have become a major concern worldwide. These crimes strongly jeopardise financial stability, at both firms’ and countries’ levels. National and intercontinental statistical levels for such crimes show sharp increases and many governments have now clearly woken up to the serious implications. At an optimistic level, it is hoped that correct application of policies (including EU Directives), and related measures, may yet help to minimise such negative consequences.

This study provides an evaluation of ML and TF, and of the action taken by international and local regulatory bodies, in trying to counteract the undesirable economic effects posed by these criminal activities. The Financial Action Task Force (FATF), the Financial Intelligence Unit (FIAU), the UK’s Financial Conduct Authority (FCA), and recent European developments, are examined. This work also analysis the initiatives undertaken by various Maltese financial institutions.

Using qualitative and quantitative approaches, this study evaluates the extent to which financial institutions in Malta are complying with regulatory bodies, and how efficient they are when applying the AML and CTF procedures. The study also analysis data collected through an online questionnaire and individual interviews carried out with professional bodies whose area of competence are precisely ML and TF.