EU reminds Malta to keep its eye out for money laundering

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When a bunch of money-centric businesses move in, like gambling, finance, or cryptocurrency, it’s important to keep everything well supervised. That’s what the European Commission has recently informed Malta, asking it to step up its anti-money laundering enforcement effort, reports Malta Today.

The motivation for the Commission to specifically address Malta on this issue was the recently growth of the island state’s gambling and financial industries, specifically in the area of cryptocurrency operators. They wrote:

“Governance shortcomings, particularly in the fight against corruption, may also adversely affect the business environment and weigh negatively on investment. In particular, there is a risk of conflict of interest at various levels of government.”

The advice comes with some compliments though, suggesting that while Malta might need to do more, it’s already moving in the right direction. “The recent increase in the human and budgetary resources of the Financial Intelligence Analysis Unit as well as the enhancement of its procedures and processes are positive steps,” they wrote.

It’s not just a matter of monitoring for money laundering amongst crypto exchanges and gambling websites. The EU also showed concern that Malta tax laws might encourage companies to get creative with how they file their taxes, something they warned needs to be addressed. “The high level of royalty and dividend payments as a percentage of GDP suggests that Malta’s tax rules are used by companies that engage in aggressive tax planning,” the EC said.

While Malta has been one of the more progressive environments for both cryptocurrency and gambling regulation, they’ve also approached both sectors in professional ways, to ensure they are seen as a respected regulator globally. As a result, they’ve seen incredible investment in both sectors, propelling the tiny nation to be a leader punching far above its weight.

These new advisories by the EU Commission shouldn’t really be seen as criticisms, but as helpful reminders that money-focused businesses need extra attention, because if left unattended to, bad actors could move in and capitalize. With a stricter enforcement of existing anti-money laundering rules, and a better tax structure, Malta should be set to continue leading the way in regulations.