Malta placed on UK high-risk list for money laundering & terrorism financing

Malta has been added to the UK’s list of high-risk countries for money laundering and the financing of terrorism, in the latest indictment of the jurisdiction’s reputation.

Malta’s addition came into effect on 13th July, as the UK added its latest wave of countries to the list. Haiti, the Philippines and South Sudan were also added. Ghana was removed.

The list is used for purposes of enhanced due diligence requirements, and the UK expects the list to have “no, or no significant” impact on the UK private, voluntary or public sector is foreseen.

Under UK money laundering laws, any transaction with a person in a high-risk country will be subject to enhanced due diligence requirements.

According to Section 33 of the country’s ‘Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017’, this enhanced due diligence requires a number of measures to be taken for transactions with high-risk parties.

This includes the obtaining of additional information on the customer, the business relationship, the source of funds, reasons for the transaction, and the enhanced monitoring of the business relationship by increasing the number and timings of controls applied.

Malta’s addition to the list comes after, in June, the Financial Action Task Force (FATF) placed Malta on its greylist, identifying deficiencies in Malta’s anti-money laundering and funding of terrorism framework.

With the exception of Iran and North Korea, which appear on the FATF’s blacklist, the UK high-risk list is largely identical to the greylist.

This means Malta is currently joined on the UK list by Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Democratic People’s Republic of Korea, Iran, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua,  Pakistan, Panama,  Senegal,  Syria, Uganda, Yemen, and Zimbabwe.