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Lawyers remain laggards in adopting money laundering risk assessment tools (BRAS/CRAS)


It is reported that In Malta, Only 57% of lawyers had a business risk assessment (BRA) in place last year, placing them last in a list of sectors that includes credit institutions, gaming companies, trust services providers, notaries and accountants.

Lawyers remained laggards in a league table of sectors obliged to have a business risk assessment, a review by the Financial Intelligence Analysis Unit shows.

Only 57% of lawyers had a business risk assessment (BRA) in place last year, placing them last in a list of sectors that includes credit institutions, gaming companies, trust services providers, notaries and accountants.

However, the FIAU's drive to achieve more compliance from subject persons has left its mark since in 2019, only 44% of lawyers had a BRA in place.

The overall results show that improvements were registered in every sector as Malta continued with its anti-money laundering drive.

A BRA is a tool by which operators in financial services analyse client risk and how this can be minimised through mitigation measures. It is part of the anti-money laundering obligations imposed on key operators.

A significant improvement was seen among real estate agents. Whereas in 2019, only 46% of real estate agents had a BRA in place, this shot up to 73% last year.

The champions were credit institutions where 100% of operators had a BRA in place, followed by financial institutions at 94%.

There were 80% of accountants who had a BRA in 2020, up from 65% a year earlier.

Financial services practitioners and ancillary services to the industry were rocked by the high-profile money laundering prosecutions of late that saw partners at Nexia BT and Zenith being charged along with their clients.

In the guidance document released last week by the FIAU, the regulator noted that the number of entities that did not have a BRA dropped to 15.2% last year from 24.3% in 2019.

All sectors experienced an increase in risk assessment compliance ranging between 10% and 27%.

The Malta Gaming Authority and the Malta Financial Services Authority also contributed to the exercise.

In terms of the quality of the BRAs adopted by the operators, the FIAU said "a good number" adopted detailed methodologies that explained the approach used to determine inherent risk and control effectiveness.

But the FIAU also found deficiencies in some of the assessments presented by operators.

  • "Instances were noted where the BRA did not explain how the likelihood and impact level for each inherent risk and the control effectiveness level were calculated… [some did not say] how the control measures serve to mitigate the specific risks identified," the FIAU said.

Read more at Malta Today


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