Author: Nicola Sharp 7 July 2021
These include Malta – the first European State to be listed. Nicola Sharp, of financial crime specialists Rahman Ravelli, considers the challenges they face.
Malta, Haiti, South Sudan and the Philippines have been added to the Financial Action Task Force’s list of jurisdictions that need closer scrutiny due to their money laundering shortcomings.
FATF has placed the four on its “grey list’’ of states that require increased monitoring for their failure to meet international standards on tackling money laundering and terrorist financing. All four have committed themselves to taking action to tackle the failings identified by FATF; including making improvements to their registries of beneficial owners.
As the first EU member to be put on the grey list, Malta has been critical of its inclusion; with Prime Minister Robert Abela calling it unjust. The FATF has acknowledged that Malta has made some progress but has said that more work needs to be done. Malta must give its Financial Intelligence Unit more of a role in supporting criminal tax and money laundering investigations and in identifying related risks.
The Philippines has been told, among other things, to tighten its supervision of non-financial businesses and professions and enhance its financial sanctions framework to address the threat of terrorist financing. Both South Sudan and Haiti will draft national risk assessments in order to determine how vulnerable they are to illicit finance.
It is likely that financial institutions in these four nations will face increasing compliance costs because of the FATF’s action. International trade in these countries is also likely to suffer as a result of their grey list-status.
These factors may prove to be the driving force as the four nations strive to ensure they tackle the current shortcomings that the FATF has pinpointed. There is little doubt that the FATF will be watching closely as they attempt to make improvements.
Nicola is known for her fraud, civil recovery and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.