An analysis of the implementing procedures issued by the FIAU, applicable to company service providers in Malta

Abstract

Throughout the past few years, the general Maltese perspective on AML/CFT obligations has had to change drastically to be able to keep up with the constantly evolving challenges ancillary to the financial and business sectors. However, this change in culture and understanding was not always deemed to be necessary by stakeholders, the legislator, and the authorities since it was always disregarded until Malta became the target of international scrutiny under the watchful eye of the FATF. The stakeholders considered in this dissertation are Company Service Providers and Subject Persons, who are now acting as gatekeepers against any threat of ML/FT. Nevertheless, this was not always the case, and Malta’s reputation was slumping down since it had not shown enough care towards its obligations and the FATF’s decision to place Malta under increased monitoring was the trigger which resulted in a cultural change. The FIAU was placed under heavy critique by the FATF, and to combat the criticism it issued several guidance documents which were intended to aid and facilitate the understanding of obligations to subject persons acting in Malta. This dissertation will be delving into what brought about the changes in the CSP sector in terms of how and from where the changes emanate. Moreover, it delves into the effectiveness of the ‘guiding approach’ taken in the Implementing Procedures Part One and Part Two, by the FIAU. The assessment of the latter is done through collected qualitative data from different CSPs. In addition, it was evident that some issues would not be remedied by the CSPs themselves, so therefore the dissertation also takes the views of the FIAU into consideration, and merges both sides together in a sound conclusion which mentions different views and how they may be remedied through different recommendations which are made by the researcher.