The infamous Moneyval test has dominated Maltese political discourse for the past year. But aside from the question of whether Malta will pass or not, the process itself remains a cloudy concept to most. In this article, we attempt to help you wrap your mind around what all this really means.
What is Moneyval?
This is the commonly known name of the committee of experts on the evaluation of anti-money laundering measures and the financing of terrorism.
It works within the Council of Europe and reports directly to its 47 member states.
What does Moneyval do?
It evaluates individual countries and what level of compliance they have with the main international standards against money laundering and financing.
From this evaluation, it then makes recommendations to the country’s authorities on how they can improve their systems.
Who does Moneyval work with?
Some of the closest organisations it works with in the global fight against money laundering and terrorism financing are; Financial Action Taskforce (FATF), International Monetary Fund, World Bank, United Nations, and the European Union.
How will Malta be tested?
Moneyval will assess Malta’s effectiveness in combatting money laundering across 11 key areas.
Which are the key areas?
- Risk, Policy and Coordination
- International Cooperation
- Supervision
- Preventive Measures
- Legal Persons and Arrangements
- Financial Intelligence
- Money Laundering Investigation & Prosecution
- Confiscation
- Terrorism Financing Investigation & Prosecution
- Terrorism Financing preventive measures & Financial Sanctions
- Proliferation Financing Sanctions
How does Moneyval grade the areas?
By their effectiveness – High, Substantial, Moderate, Low.
How do you ‘pass the test’?
The country must be awarded a grade of ‘Substantial’ in at least 3 out of the 11 categories.
When was Malta last evaluated?
2019
Did it pass?
No.
Why is the upcoming evaluation important?
When Malta failed the 2019 evaluation, it was placed under a monitoring list by the aforementioned FATF.
The monitoring process takes around a year to be carried out. After that, if Malta would have managed to fill the holes in its approach towards money laundering, the process would be over. If not, FATF can move on to transfer Malta onto its ‘grey list’.
What is the grey list?
It is a list of countries that pose a high risk of financial crime. Till now, no EU member state has ever been included in this list.
What happens if Malta is grey listed?
The Malta Employers Association has notably warned that the repercussions could be as negative as those inflicted by the Covid19 pandemic.
Having been rocked by a vast number of political and financial scandals in the past decade, this classification is widely understood to be the certificate of Malta’s devaluation as an attractive economy.
This would lead to further significant contractions in the financial and iGaming sectors, which, added to the ailing tourism industry and a fall in manufacturing output, would place an amount of pressure on the economy that some experts believe, the country cannot withstand.
Will Malta be grey listed?
Government officials, most significantly, the prime minister, have stated several times that they are sure the country will pass “with flying colours” due to reforms that have been made.
That said, no-one can know for certain until the report is published (or leaked).
When it is, we will be sure to be among the first to let you know.
Written by: Gianluca Vella
A Bird's Eye View 