No bank monitoring orders between 2015 and 2018 – Council of Europe report

The authorities in Malta are failing to regularly use the powers provided by a Council of Europe convention which allows measures to monitor banking operations as investigation into possible money laundering activities, a report has found.

A Council of Europe monitoring review looking into how individual countries are using the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, has called on the Maltese authorities to further raise awareness of the practical possibilities for law enforcement through these powers.

It pointed out that a previous follow-up report had confirmed that between 2015 and 2018, the Maltese courts did not issue any monitoring orders. “Therefore, Malta is invited to apply monitoring measures more frequently and develop cases on its implementation,” the review added.

Article 7 of the convention has introduced powers to make available or seize bank, financial or commercial records for assistance in actions for freezing, seizure or confiscation.

In particular, Article 7 paragraph 1 provides that “each party shall adopt such legislative and other measures as may be necessary to empower its courts or other competent authorities to order that bank, financial or commercial records be made available or be seized in order to carry out its actions”.

It also clearly stipulates that a party shall not decline to act under the provisions of this article on grounds of bank secrecy.

Malta is one of 34 countries that signed this convention and the review suggests that, overall, Malta is applying only part of this particular Article in the convention.

Malta falls under a list of countries where the requirements set in the convention are, in general, implemented but notes that the scope of these provisions differs significantly between each State.

The aim of the report is to seek to establish which States have successfully made use of this power laid out in the convention. It also seeks to determine the extent to which countries or parties can apply this measure upon request of another State and then communicate the results to the requesting State.

A 2014 assessment report on Malta noted that monitoring of banking operations that are being carried out through one or more identified accounts can be performed based on a monitoring order.

Anti-money laundering laws in Malta enable the Attorney General to request approval by the Criminal Court for a monitoring order in case of suspicion that there is a money laundering offence. Based on such an order, the banks are required to monitor, for a specific period, transactions or banking operations that are being carried out through one or more accounts.

The accounts monitored can be of a specific suspect, can be suspected of being used in the commission of a criminal offence or can provide information about the offence or about the circumstances of an offence.

The results of the monitoring must be communicated to the persons or authority indicated by the Attorney General and the collated information is transmitted subsequently to the Attorney General.

In its conclusions, the review stated that Malta has enough legal provisions in place to obtain information on account holders but suggested the authorities make more regular use of the powers laid out in the convention.

This review comes at a time when the authorities in Malta are bending over backwards to try and get financial institutions and banking practices in order to avoid Moneyval’s greylisting. Experts have repeatedly warned of the dire consequences should Malta fall into this list of countries.