Malta’s Financial Intelligence and Analysis Unit (FIAU) has issued its guidelines on the identification and prevention of terrorism financing (TF). Highlights from the FIAU’s document are summarized below.
The FIAU guidelines describe the difference between money-laundering (ML) and TF and discuss the mechanisms of TF in Malta. The FIAU has also explained the typologies and emerging trends in TF, highlighting the vulnerabilities and red flags associated with each trend. Such typologies and trends include cash, fund transfers and money remittance, virtual financial assets, loans, non-profit organizations and charities, legal persons and arrangements and trade-based TF.
The FIAU also provides guidance on how to prevent TF. The most important requirement for preventing TF is to stay alert at all times. Authorities must not entertain any individuals or entities under sanctions by the EU or other countries. Therefore, screening of all clients on a regular basis is crucial to the prompt identification of suspicious trends. Special attention must also be given to customers who may be located in areas of conflict or high-risk jurisdictions. Moreover, transaction monitoring must involve a thorough investigation of whether a certain transaction made by a client makes logical sense in terms of client history and economic background. These steps can help intensify Malta’s fight against TF.
