MBA contributes to the 22nd May 2020 edition of the Government’s, Malta Financial Services Oversight newsletter

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The Malta Bankers Association supports regulatory advances in Malta

The Malta Bankers Association (‘Association’ or ‘MBA’), established in May 1962, represents the interests of the banking sector in Malta through advocacy, capacity building, education and networking. It is also a full member of the Brussels-based European Banking Federation and the European Payment Council. Since the 1990s, the Association and its member banks have been actively engaged in promoting the highest standards of AML compliance, mindful that these are key to a healthy development of Malta as an international financial and business centre.

Over the years the MBA has co-operated fully with both local and international bodies, including the IMF, FATF and MONEYVAL, to ensure that Malta continuously raises the bar in PML and CFT measures. And in recent times it has been particularly focused on addressing the recommendations set out by MONEYVAL, working in conjunction with the regulatory authorities, particularly the FIAU and MFSA.

The MONEYVAL Report emphasised that the financial sector’s appreciation of financial crime compliance and related risks varies, with some segments and professions showing serious deficiencies. Whilst the banks generally scored quite well in this regard, members wholly recognise the fundamental importance of reducing the risk of ML/FT and are dedicating significant resources to this effect, acknowledging that there is still room for improvements.

In recognition of the urgency of this matter, over the last year the MBA has worked closely with the authorities to collate feedback from its 23 members through its internal PML Committee. As in the past, it has continued to give feedback to several regulatory consultation papers to ensure that the experience gained from their operations and practical issues encountered could be reflected in any proposed regulatory enhancements.

Karol Gabarretta, Secretary General of the MBA said, “The Association acknowledges the tangible improvements made by the authorities in terms of increased resources and expertise. This has corresponded with various measures, practices and protocols implemented by the member banks, such as de-risking resulting from the adoption of stricter risk-appetites, rigorous onboarding procedures, extensive transaction monitoring, more comprehensive screening of persons and jurisdictions and ongoing monitoring of client relationships. These and other changes resulting from the banking sector’s experience and coverage permit Malta to shore up practices and standards in other sectors which should help the reputation of the jurisdiction to strengthen. Moreover, the MBA has sustained the development of more constructive working relationships with the relevant competent authorities, driven by the common goal of full and complete collaboration in the fight against ML and FT. All members are committed to a robust public-private partnership to tackle a common goal and reach the same objective.

Over the years the Association has also actively collaborated in efforts to disseminate information and education, the latest in February 2020 with the co-hosting, with ARQ, of the AML & Financial Crime Conference attended by over 200 delegates. The event focused on the findings and actions resulting from MONEYVAL’s 5th round evaluation and the need to restore Malta’s reputation, while also gathering valuable insight about the steps the country needs to take to enhance the mechanisms to combat corruption, organised crime, money laundering and other serious financial crime.

Karol Gabarretta, Secretary General of the MBA added, “The conclusions and recommendations gathered from this event, together with the regular meetings that the MBA has with the regulatory authorities, have crystallised into two areas for further attention. The first is the need for careful consideration when exploring new areas of economic activity and being fully mindful of the risks that they carry and the attraction for financial crime and money laundering. And the second, seeing the efforts taking place to strengthen prudential and AML/CFT supervision, the need for independence of the regulatory and supervisory authorities. Both areas continue to be structural areas of discussion that the MBA remains close to regulators and lobbies on.

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