Preventive strategies adopted by Maltese entities in their fight against terrorism financing

Abstract

This dissertation examines Malta's compliance industry and the appropriate measures to combat funding of terrorism. This research study mainly explores previously known literature in order to develop a comparative background model of the various measurements or strategies subject persons utilise in their system. This literature includes a comprehensive discussion about the use of technology in due diligence tools, the implementation challenges, and the repercussions of noncompliance for businesses. The researcher in this study has opted to use a qualitative approach whereby semi-structured interviews were conducted with experts and individuals familiar with Malta's compliance industry. Making use of such strategy was fundamental for this dissertation to include the necessary, straightforward, and precise information on the strategies utilised by Maltese entities in their continuous fight against terrorist funding. In conclusion, this research study delves into how due diligence tools can be used as a preventive measure for countering terrorism financing and whether they are conducted manually or automated with the help of technology. Moreover, it also mentions the importance of technology when carrying out due diligence. This study suggests that automated systems are more efficient and accurate when the systems are tailor-made to the needs and requirements of a company. Apart from that it also highlights the differences between money laundering suspicious transactions and funding of terrorism suspicious transactions. Therefore, this study mentions the different characteristics required by an entity to identify and distinguish transactions connected to funding of terrorism or money laundering. These include motivation, intention, life cycle, and source of funds. Furthermore, this research study specifies the different challenges encountered by Maltese entities when working on countering funding of terrorism. Lastly, this study sheds light on the consequences faced by entities in cases of non-compliance. This includes administrative measures, reputational concerns as well as financial losses.