According to the Malta Business Registry’s (MBR) annual report for 2020, changes made in the wake of Malta’s failed Moneyval assessment in 2019 resulted in its introduction of “new rigorous procedures” that improved governance and compliance during 2020.
The report, released the day after Malta was placed on the Financial Action Task Force (FATF)’s grey list for countries with ineffectual anti-money laundering and counter-terror financing processes and frameworks, insists that the MBR implemented all of Moneyval’s recommendations.
Indeed, whilst the country was voted onto the FATF grey list on Wednesday, the fact that it passed its latest assessment by Moneyval in May indicates that its bodies, including the MBR, did indeed make progress.
During 2020, the MBR says it focused on the enhancement of its due diligence processes and legislative frameworks in order to safeguard the Maltese jurisdiction while ensuring an accurate Registry.
The compliance Unit at the Registry reviewed more than 12,000 forms and conducted more than 27,000 checks during the year, and screening related to new companies amounted to around 11,000 checks, including analyses of directors and shareholders/beneficial owners.
In 2020, the unit conducted 828 onsite inspections and projects it will carry out around 1,000 during 2021.
Explaining the broad actions it took, the MBR comments it “undertook significant legislative developments headed by the legal and enforcement unit as per the evaluation report compiled by [Moneyval], the legislative initiatives put forward by the EU and the digitalisation drive being undertaken by the MBR to launch a new electronic system using the latest technology”.
The legal unit at the organisation undertook the “challenging” task of keeping the Register of Commercial Partnership in good order through the striking of defunct companies that were in breach of the Companies Act and its subsidiary legislation.
These breaches concerned four key matters: a failure to register required information on entities’ beneficial ownership, a lack of filing of annual financial statements and returns for several years, lack of appointed company officers, and being in a dissolution process lasting a decade or longer.
In view of this, the legal and enforcement unit issued 56,000 notifications sent as legal letters, resulting in the striking of 11,289 companies from its register, as well as an additional 1,166 companies that failed to file beneficial ownership information.
Regarding enforcement, legal letters were sent to company officers as final warning to settle outstanding duties and judicial letters were sent as enforcement penalties.
On the other hand, the MBR notes that despite the COVID impact on the global economy, it registered 3,514 new commercial partnerships in 2020.
“The MBR has stepped up its due diligence procedures by endowing itself with the power to take concrete actions that prove the seriousness and credibility of the entity in question – from asking for additional documentation for verification purposes and applying sanctions when necessary to conducting onsite inspections, increasing administrative penalties and enhancing the enforcement of penalties’ said MBR CEO Joseph Farrugia.
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