Malta may be nearing the end of its time on the Financial Action Task Force (FATF) greylist of financially untrustworthy institutions, with a visit from the body due this Friday.

The purpose of the FATF visit to the island – which is a major hub for both the financial and gambling sectors – is to confirm progression of the action plan implemented by the country’s authorities to address fiscal concerns. 

Malta was first placed on the greylist in June of last year after the FATF, the AML and anti-terrorist financing investigative unit of the G7, identified a number of discrepciices with regards to money laundering.

Commenting in an SBC Webinar, a panel of guest speakers spoke to Payment Expert Editor Joe Streeter about the impacts of the greylisting on the island’s economy. 

In particular, Yanica Sant of the General Counsel, Malta Gaming Authority (MGA) explained that the greylisting has significant impacts on the financial reputation of the island – which is home to offices and/or headquarters of several major gaming firms, including Betsson, Tipico and William Hill.

Sant remarked: “We need to remember that what the greylist actually is that the jurisdiction is being placed under increased monitoring, and that makes it a reputational issue because there is no word worse than ‘greylist’.

“What we need to do is address reputation, specifically because there are no points relating to the matter in which the gaming industry is regulated in Malta. Our plan is to work on our reputation and ease the problems.”

However, MGA delegate did assert that the gambling industry – which accounts for 12% of Malta’s economy and generated €700 million annually as of 2020 – was not under scrutiny, but that the greylisting could still have repercussions for the sector. 

“We understand the inconvenience and the worry that comes with such a direct effect, and that is why every institution in Malta – and we are one of them – have a plan that is being set in motion in order to get out of this greylist,” she continued. 

Meanwhile, Enrico Bradamente, CEO, at Maverick Slots and James Scicluna, Co-Managing Partner at WH Partners, focused on how enhanced due diligence checks implemented against firms and individuals registered on the island by financial institutions have slowed cash flows in the aftermath of the greylisting. 

“A process of enhanced due diligence is taking place, specifically for banks and financial institutions that are outside of Malta,” Bradamente noted. 

“Those that are inside of Malta, we have not seen that yet, we do not expect that anything that is within the jurisdiction will change. This is the biggest impact, the other big one that we have seen is the reputational effect. 

“Whilst the greylisting is a very technical matter, the three items that Malta failed on are very specific and quite technical – whilst the common man in the street in Malta or outside would not know the details of the greylisting process, they have seen the headlines, which is creating negative effect by association.”

The robustness of Malta’s financial security policies and the ability of its infrastructure of counter money laundering and illegal betting have been repeatedly reiterated by both the MGA and the country’s government.

The FATF’s assessment of the government’s action plan, drafted last year by Finance Secretary Alfred Camilleri, will determine whether the island can be removed from the greylist – which consists of 19 other countries including Zimbabwe and Syria.