Malta Online Operators Should Prevent AML Review Shortcomings, Says MGA, FIAU

March 19, 2024
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A thematic review of Malta’s online gambling sector has revealed that some money laundering reporting officers need to “significantly improve” their knowledge, awareness and training.
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A thematic review of Malta’s online gambling sector has revealed that some money laundering reporting officers (MLROs) need to “significantly improve” their knowledge, awareness, and training.

The Malta Gaming Authority (MGA) and the Financial Intelligence Analysis Unit (FIAU) published the findings of their joint assessment of online operators’ knowledge of anti-money laundering (AML) and counter-terrorism financing (CTF) on March 18.

The review concluded that there is a “varied” knowledge, awareness and training of MLROs and other relevant employees around the AML/CTF regulatory framework.

“Some demonstrated a good level of knowledge, awareness and training, whereas for others it was evident that the level needs to be significantly improved,” the report states.

The FIAU said the findings are “crucial” and “play a vital role in safeguarding remote gaming operators from being exploited for money laundering activities”.

Online operators are encouraged by the MGA and FIAU to read the review and “take steps to incorporate any necessary enhancements into the remote gaming operators’ AML/CTF controls, policies, and procedures to prevent the shortcomings identified in this paper”.

During the first quarter of 2023, the FIAU and MGA reviewed the AML/CTF policies and procedures of 23 online operators, interviewing 73 of their employees, including 23 MLROs.

Interviewees were questioned on their regulatory and practical understanding of AML/CTF, with their overall awareness of the topics aggregated and analysed.

A chart included in the review tracks the level of awareness on 13 key topics, with training receiving the best 100 percent awareness score and application, and the extent and timing of customer due diligence receiving the lowest awareness score of 21 percent.

Three other high-level awareness scores were on identification and verification of the customer with an 82 percent score, reporting obligations with a 74 percent score and ongoing monitoring with a 74 percent score. 

The rest of the topics varied between a 48 percent score on recordkeeping and 58 percent scores on outsourcing and establishing the customer’s business and risk profile.

In 2023, Malta more than tripled the number of fines it issued, although starting from a relatively low base, with every penalty reflecting an AML failing identified by the FIAU.

In total, the FIAU issued seven fines in 2023, for amounts totalling just under €1m, roughly double the amount collected in 2022.
 

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