Malta’s successful removal from the FATF grey list underlined the “delicate balance between stringent financial scrutiny and maintaining an attractive business environment”, according to Luis Perez, Chief AML Officer at Lottofy, the brand name of Clobet Limited.
Speaking to Payment Expert, he emphasised that the strategic importance of the region to the European and global gaming sector has truly been highlighted amidst Malta taking the decisive steps to depart the FATF grey list.
The decision of the FATF’s to add Malta to a rogue list of nations on the grey list in 2021 prompted immediate and significant action from the region as PM Robert Abela and Finance Secretary Alfred Camilleri drafted an ‘action plan’ to remove Malta from the greylist by 2023, an ambition they succeeded in achieving.
Perez added: “Personally, I think it marked a before and after on a number of issues. The greylisting highlighted serious deficiencies in Malta’s anti-money laundering measures, leading to increased monitoring, restricted cross-border transactions, difficulties in obtaining credit and reduced foreign investment. This had a profound impact on Malta’s economy, particularly its igaming sector, which constitutes around 12 per cent of the country’s GDP.
He described “widespread concern within the industry”, caused by the greylisting as a survey by the Maltese Employers’ Association detailed that over 89 per cent of financial services and online gambling firms expected negative repercussions.
“In response, Maltese authorities implemented extensive reforms to align with FATF’s recommendations, enhancing their regulatory frameworks and increasing enforcement actions. This proactive approach led to Malta’s removal from the grey list within a year, demonstrating its commitment to upholding international financial standards,” revealed Perez.
“This milestone reinstated investor confidence and stabilised the gaming sector. Malta’s reputation for reliable licensing and favourable tax regimes, managed by the Malta Gaming Authority, remained intact, ensuring the retention of gaming operators during the greylisting period. The resilience shown by these companies emphasised Malta’s critical role in the global igaming sector.”
Moving forward he emphasised the importance of collaboration between the financial sector and the gambling industry, as the development of mutual knowledge and a greater understanding of best practices continues to grow.
“Adopting best practices like thorough KYC procedures, continuous transaction monitoring, and prompt reporting of suspicious activities can greatly reduce the risk of money laundering within the gaming sector. As gaming operators, prioritising compliance is essential for us to avoid severe penalties, financial constraints and damage to reputation.
“Another key lesson involves implementing a risk-based approach to AML compliance. By focusing resources on high-risk areas, such as transactions involving virtual currencies, gaming companies like us can improve their ability to detect and prevent illicit activities. Moreover, maintaining transparency in AML measures not only ensures regulatory compliance but also builds trust among stakeholders and creates a safer gaming environment.
“Continuous employee training, internal audits and leveraging technology for enhanced compliance are further lessons that the gaming sector can learn from the payments industry.”
He concluded by pinpointing his belief that education and development has enabled the industry to “fortify its regulatory frameworks, bolster enforcement measures and maintain industry confidence”.
