Malta’s AML Watchdog Vindicated: Court Rulings Confirm FIAU’s Power to Fine

Malta's Financial Intelligence Analysis Unit (FIAU) has secured its authority to impose penalties on financial institutions following favourable constitutional court decisions that reversed earlier lower-court rulings. The judgments validate the regulatory framework underpinning the country's anti-money laundering enforcement regime.

Alfred Zammit, Director of the FIAU, sat down with AML Intelligence and confirmed that the recent legal rulings demonstrate that the organisation operates within constitutional boundaries. The rulings enable the agency to continue functioning under existing legislation without requiring major legal reforms to its penalty structure.

Zammit emphasised that the FIAU has strengthened procedural safeguards to ensure companies receive comprehensive hearings before penalties are finalised. The agency now conducts oral hearings following initial written submissions and allows for a second round of written representations after issuing potential breach notices.

Additional appeals from other companies remain pending in Malta's courts. While each ruling technically binds only the parties involved, Zammit expressed optimism that future judgments will follow the same pattern, given the similarity of arguments presented across cases.

Zammit stressed that enforcement action represents a last resort, with the agency preferring constructive relationships with supervised entities. He noted that even firms currently in litigation typically maintain positive working relationships with the regulator, acknowledging that appeals are a legitimate right but emphasising that strengthening anti-money laundering controls remains the ultimate priority.

The court decisions provide regulatory clarity for Malta's financial sector and affirm the FIAU's role in maintaining compliance governance across industries including banking, fintech, and cryptocurrency operations.

The original interview can be found on the AML Intelligence website here.