THE CHANGING THREAT OF FINANCIAL CRIME
Taccogna: Has the financial crime threat changed in recent years? How is Malta, in particular, affected by it?
Cuschieri: Financial crime has, in recent years, become far more complex and sophisticated than ever. We were used to thinking of money laundering as mules placing illicit funds into the system by depositing cash into bank accounts. While that type of financial crime still exists, the majority of the current threat comes from other channels, such as offshore companies, complex corporate structures and cryptocurrencies. The anonymity and un-traceability that these devices offer are attractive to those seeking to launder proceeds of crime. Case after case, we realise that we all – regulators, governments and industry participants alike – had underestimated and misunderstood the extent to which these devices were – and are – utilised for money-laundering purposes. Malta, like other smaller jurisdictions, faces a particular challenge. Its attractiveness proposition is based, among other things, on its being open to lines of business that have the potential to attract financial crime – for example cryptocurrencies, gaming and citizenship by investment. While this does not equate to being lax towards financial crime, it creates the need for expertise, processes and systems capable of dealing with the increased risk. This expertise is not always readily available in the market, even in larger jurisdictions, and the problem of sourcing it is an even taller order for smaller jurisdictions, such as Malta, with a smaller resource pool.
Jul-Sep 2019 Issue
FTI Consulting
Malta Financial Services Authority