Regulators cannot do everything, be everywhere – Finance Minister

Finance Minister Edward Scicluna speaks about the need to strengthen regulation

Finance Minister, Edward Scicluna has said that while regulators need to continue to be strengthened they cannot ‘do everything and be everywhere’. The Minister expressed his frustrations at the 67^th meeting of the Joint Committee for the Prevention of Money Laundering on Friday last week. He also made mention of the need for businesses to be proactive in self-regulating.

"I don’t think citizens are upright and go about their business in the legal way because there are the police the down the road. The police are there to deter crime and those who are not upright. It would be a police state if we were to expect every citizen to not be upright. It’s the same with our businesses”, Scicluna said.

Edward Scicluna.

He said however that regulatory authorities are the fabric of civil society and government and shouldn’t be criticised too heavily. “We need to strengthen them and that’s what we are doing; it is not a question of more resources – the point is better resources and a smarter way of doing things”, he said.

Speaking specifically about Malta, he said that the island had carried out its own risk assessment to evaluate the extent of Malta’s exposure to money laundering and that while the country had at times come under fire it was hardly alone in failing to catch problems.

“Malta and many other countries have all the necessary procedures in place but it is still discovered that hundreds of millions if not billions are passing through an institution.  None of the financial jurisdictions can say that there is no money laundering passing through their institutions,” Scicluna said.

He said that it was good to have the proper legislative framework in place, however that alone doesn’t go far enough. What is especially needed is that institutions are effective and coordinated enough to bring cases to prosecution and eventual conviction. He said that consultations were underway to improve various institutions such as the FIAU, Asset Recovery Bureau, Police, and Economic Crimes Unit amongst others.

“We found in our national risk assessment that our biggest weakness was coordination between regulatory authorities – it is an open secret – because it used to be an informal system which served us for a long time, but now needs to be rigorous and with a plan.  In fact we now have a 47 task plan – all of them addressing weaknesses – to do over a period of 3 years”, Scicluna said.