Malta, Europe’s iGaming hub, has published its 2023 National Risk Assessment (NRA) on the 15th of January, 2024. The NRA contains a comprehensive evaluation of the country’s exposure to money laundering (ML), terrorist financing (TF), financing of proliferation (FP), and targeted financial sanctions (TFS). The NRA serves as a crucial tool for identifying and addressing emerging risks, ensuring that Malta maintains and strengthens its reputation as a compliant and responsible jurisdiction, following the political rollercoaster ride of the last years.

Please find a link to the document here.

Key Findings of the NRA:

Risk of ML and TF: The NRA still highlights a heightened risk of ML and TF emanating from Malta’s iGaming and financial services industries, but recognises the effectiveness of counter measures implemented. Particularly due to the sector’s high value transactions, anonymity of online gaming, and potential for use by criminals to attempt to launder illicit proceeds, the sector’s inherent risk makes the implementation of robust and effective countermeasures a must for any subject person, from a business.

Focus on High-Risk Operators: The NRA emphasizes the need for subject persons to conduct thorough due diligence on customers, especially those from recognised high-risk jurisdictions or with suspicious profiles, including enhanced monitoring and transaction reporting strategies.

Scrutiny of (High-Risk) Transactions: The NRA calls for strictscrutiny of high-value transactions, particularly those involving cryptocurrency or wire transfers originating from jurisdictions identified as high-risk for ML and TF.

Emerging Risks of FP and TFS: The NRA acknowledges the emergence of FP and TFS risks, particularly in relation to cross-border transactions and the use of digital currencies and in light of the current conflicts. This requires subject persons to implement additional measures to detect and prevent such activities.

Implications for the iGaming Industry:

Regulatory Compliance: iGaming operators in Malta better see the signs and prioritise compliance with the AML/CFT/TFS. This may include, but is not limited to strengthening KYC/CDD procedures, enhancing due diligence efforts, and the implementation of robust transaction monitoring systems.

Training: Operators should focus on actively and effectively educating their personnel about the risks of ML and TF and the related legal duties.

Stakeholder Collaboration: industry stakeholders shall cooperate, in order to identify and counter potential threats, for the sake of an improved overall effectiveness.

Continuous Improvement: Operators must maintain a culture of continuous improvement, regularly reviewing their AML/CFT procedures and implementing new technologies to stay ahead of evolving threats. This proactive approach can strengthen their position as responsible and compliant businesses.

May the NRA not be considered to re-invent the wheel, its findings and especially the recognition of the iGaming sector’s inherent risks show that the only a coherent and holistic approach to towards ML, TF, FP and TFS will lead to effective measures, leading to acceptable residual risks results, for subject persons.

Chevron Group offers a range of compliance-related services, such as, inter alia, strategic, and operationalcompliance advice, risk management, training, auditing, provision of key personnel and regulatory representation, operational support, and project management. Contact Thees Buschmann at thees@chevron.group to see how we can help your business strengthening your compliance approach, reduce regulatory risks and steer your business towards sustainable success.