FATF status

Malta is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement  -  17 June 2022

The FATF welcomes Malta’s significant progress in improving its AML/CFT regime. Malta has strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in June 2021 related to the detection of inaccurate company ownership information and sanctions on gatekeepers who fail to obtain accurate beneficial ownership information, as well as the pursuit of tax-based money laundering cases utilising financial intelligence. Malta is therefore no longer subject to the FATF’s increased monitoring process.

Malta should continue to work with MONEYVAL to sustain its improvements in its AML/CFT system.

Compliance with FATF Recommendations

The last Follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Malta was undertaken in 2021. According to that Evaluation, Malta was deemed Compliant for 12 and Largely Compliant for 28 of the FATF 40 Recommendations. No review of the 11 areas of Effectiveness of Malta's AML/CFT Regime was undertaken in the Follow-up MER and, therefore, these remain assessed at being Highly Effective for 0 and Substantially Effective for 2.

US Department of State Money Laundering assessment (INCSR)

Malta was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Malta’s location between North Africa and Italy makes it a transit point for narcotics and human trafficking to Europe. The country’s offshore banking sector is relatively large (eight times GDP), and its ship registry is the largest in Europe. According to the Malta Police Force, the major sources of illegal proceeds are generated through drug trafficking (in particular cocaine, heroin, and cannabis resin) and economic crimes, primarily fraud and misappropriation of public funds. The proceeds generated are not substantial and are primarily based on domestic offenses and eventual self-laundering.  Money laundering investigations related to drug trafficking revolve around the suspects living beyond their means and converting the funds by purchasing commodities, such as expensive vehicles, real estate, and other luxury goods.

Foreigners who route illicit gains from illegal activity in foreign jurisdictions to local Maltese bank accounts generate a significant volume of laundered funds. Such offenses usually relate to investment scams and tax/value added tax fraud. Representatives of the financial sector emphasize the risks involved in foreign deposits and investment by politically exposed persons (PEPs) from Eastern Europe and North Africa and the possibility of their linkage to tax evasion or the diversion of funds. These activities are usually detected through requests for assistance by a foreign jurisdiction.

While there is very little evidence of organized criminal groups laundering money in Malta, recent events have indicated that Malta’s online gaming industry may serve as a potential conduit for money laundering activities. Malta’s various financial service and gaming authorities have taken steps to increase oversight to ensure Malta’s gaming industry does not become targeted by crime organizations.

Maltese authorities have detected no terrorism financing activity, and Malta’s financial regulators consider the terrorism financing risk to be low. Contraband smuggling does not appear to be a significant source of illicit proceeds.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                          51

World Governance Indicator – Control of Corruption             62

Corruption does not represent a significant challenge for businesses operating in Malta, except for most notably the public procurement sector. This is attributed to the country’s transparent administration and economy, low levels of official impunity, and small room for arbitrary spending of public funds. Inefficient government bureaucracy and the country's shadow economy, which constitutes nearly a quarter of the entire economy, are the largest obstacles to business. Connections between the local elite and political figures also threaten fair competition. The Maltese Criminal Code criminalizes active and passive bribery, abuse of office, extortion and embezzlement, among other corruption-related offenses, and the law is effectively enforced. Businesses report bribery is rare in Malta, and the legal framework criminalizes facilitation payments and giving and receiving gifts. For further information - GAN Integrity Business Anti-Corruption Portal

The Republic of Malta is a small, strategically located country 60 miles south of Sicily and 180 miles north of Libya, astride some of the world’s busiest shipping lanes. A politically stable parliamentary republic with a free press, Malta is considered a safe, secure, and welcoming environment for American investors to do business.

Malta joined the European Union in 2004, the Schengen visa system in 2007, and the Eurozone in 2008. With a population of about 533,286 and a total area of only 122 square miles, it is the EU’s smallest country in geographic size. The economy is based on services, primarily shipping, banking and financial services, online gaming, tourism, and professional, scientific, and technical activities. Manufacturing also plays a small, but important role. Maltese and English are the official languages.

Given its central location in one of the world’s busiest trading regions, as well as its relatively small economy, Malta recognizes the important contribution that international trade and investment provides to the generation of national wealth.

Prior to COVID-19, Malta was one of the EU’s fastest-growing economies. In 2022, real GDP growth is estimated to have reached 6.6 percent. In 2023, real GDP is forecast to grow at a slower pace, by 3.1 percent, following a wider economic slowdown in Malta’s main trading partners. In 2024, real GDP growth is expected to reach 3.7 percent, supported by net exports and growth in domestic demand. Malta’s unemployment rate stood at 3.1 percent in February 2022.

The top three credit rating agencies assess Malta’s economy as stable. The current sovereign credit ratings are A-/A-2 with a stable outlook (S&P); A2 with a stable outlook (Moody’s); and A+ with a stable outlook (Fitch).

In 2020, the Government of Malta revamped its citizenship-by-investment program, which provides citizenship by naturalization to applicants (and their dependents). The new program still offers a track to citizenship through the introduction of a residency requirement before the acquisition of Maltese citizenship. The residency program offers two investment routes to acquire citizenship: i) individuals can apply after a one-year residency period if they invest €750,000 ($875,000) or more; or ii) applicants can opt to pay €600,000 ($700,500) if they apply after a three-year residency period.  IIP conditions include a €700,000 ($814,000) minimum for purchasing immovable property, or a €16,000 per year minimum for leasing immovable property (which must be retained for at least five years), and a €150,000 minimum for investment in stocks, bonds, or debentures. Applicants must also make a mandatory €10,000 ($11,600) philanthropic donation and pass a due diligence test before filing the application. In March 2022, the government suspended the processing of applications for nationals of the Russian Federation and Belarus. The suspension applies to both Malta’s citizenship-by-investment scheme as well as a residency through investment scheme, which must be renewed on a yearly basis.

Country Links

Financial Intelligence Analysis Unit (FIAU)

Central Bank of Malta

Malta Financial Services Authority