A critical examination of the fifth-anti money laundering directive and its implications on the Maltese market

Abstract

The rapid growth in money laundering presents a serious threat which disrupts the local economy and the integrity of the whole financial system. Regulators seek to constantly be a step ahead of criminals by implementing and updating measures that aim to improve on the existing preventive framework. Such measures include the Fifth Anti-Money Laundering Directive (Directive 2018/843) of the European Parliament and Council. The following study critically examines the new Directive and locates the main challenges encountered by local financial entities in their battle against money laundering. This was done by the gathering of existing literature, as well as through primary research by conducting interviews with local experts and key stakeholders in the field. At the end of the interview process, all data gathered was analysed, assessed and compared. The data collected has shed light on the Fifth Anti-Money Laundering Directive and its repercussions on the local financial market. From the interviews conducted it can be clearly seen that local regulatory authorities share the same views on the new Directive. On the other hand, local banks do not fully agree with each other. Overall, the interview responses indicate that the Fifth Directive is a step in the right direction, and it will aid to further mitigate money laundering risks. Moreover, upon finding out that Malta has been implementing aspects of the 5AMLD since before the Directive was proposed, it was concluded that such Directive would not have a major effect locally. However, the study results have also indicated that the market is still very conservative with regards to virtual currencies and is seeking further regulation on the sector before any implementation.