With the mammoth task of getting Malta off the FATF grey list in 2022 completed successfully, the FIAU achieved what some thought would be impossible. For Director Kenneth Farrugia, that success was all down to teamwork, unity and a resolute cooperation between all those at the FIAU and beyond. Now he’s looking forward to the next steps the FIAU – and Malta as a whole will take towards a safer future.
If there’s one thing Kenneth Farrugia makes clear, it’s that the FIAU’s success has been a team effort. Known for his humble approach to running the island’s Financial Intelligence Analysis Unit at a very critical time, he insists on taking none of the credit. “Yes, we have managed to achieve a lot in the last couple of years,” he says. “But that’s down to every single one of the people working here, not me. I really believe that. Every single one of us has a very important role to play.”
Kenneth – whose career has so far taken him from audit firms in the private sector to audit roles with the Government and, most recently, to his position within the FIAU – stresses that his whole leadership ethos is based on purpose.
“Purpose is critical because, to be an authentic leader, you have to work with a certain level of ethics, transparency and dedication,” he says. “
You have to be committed and passionate about your job. Our entire team is enveloped in a moral code that we take very seriously because of the nature of our work. It isn’t always easy – especially as the results we strive for take time to achieve. But we have to persevere and believe in what we’re doing. If we didn’t believe and didn’t have the sense of purpose that we have cultivated, we wouldn’t have built our fantastic team or created this entity. So, purpose truly does sit at the very heart of the FIAU – we wanted to make Malta a safer place from an anti-money laundering (AML) and a combatting the financing of terrorism (CFT) perspective, and I am pleased to say that we have.”
Making Malta safer from financial crime was among the goals the FIAU was set up to achieve when it was founded in 2002. It is our island’s national central agency responsible for the collection, collation, processing, analysis and dissemination of information to combat money laundering and the funding of terrorism. And, though set up as an agency within the ministry responsible for finance, the unit has a separate judicial personality and operates autonomously from its own offices, with its own staff.
That said, a lot has changed for the organisation in the last four years, particularly – and notably – since the Pilatus Bank breach of EU law in 2018.
“All the changes we’ve made have evolved around the fight against money laundering and the funding of terrorism – from understanding the risks within the sector to taking effective enforcement action to drive compliance,” Kenneth continues. “That includes the development of our Compliance and Supervision Platform for Assessing Risk, which is known as CASPAR, and which has been instrumental in helping us make huge strides forward.”
And then came the unfortunate moment when Malta was placed on the Financial Action Task Force (FATF) grey list and the FIAU was one of the main authorities tasked with getting the country off it. “Being placed on the grey list had a huge impact on Malta and we knew that the implications would be far-reaching,” the Director continues. “We were told by numerous companies working on the island – including those in the iGaming and financial spheres – that they could ride out the grey list for 18 months but no more. After all, the reputational impact on our country was significant, including at Government level. So, we had a serious deadline on our hands, and it became the top priority for everyone.”
And humble though Kenneth is, no one can deny the very successful job the FIAU did of achieving its goal – not by the 18-month deadline that many saw as critical, but ahead of ‘schedule’ in just one year. “It was an almost-impossible task,” Kenneth admits, reflecting on the long hours and weekends that the FIAU invested into their goal. “But we had a clear direction and knew where we wanted to get in terms of the implementation of our action points. Our team’s passion, commitment, expertise and constant support were exemplary.”
He also cites the consummate coordination between the authorities and the private sector as another contributor to the successful result. “Together we really had to demonstrate that the situation had improved in that 12-month period, to ensure the assessors knew that things would be tangibly different and not just appear so on paper. All the stakeholders pulled their weight and the results speak for themselves.”
And with that mammoth result behind them, Kenneth says he and his team are now committed to maintaining the level of effectiveness they have collectively achieved to keep moving. “We are in the unique position of having ticked the 100 per cent mark as we climbed that mountain,” he says. “We made the impossible possible by implementing drastic change throughout. And now we must retain that standard going forward. After all, other important reviews are coming our way and we must never find ourselves in the same position; it just cannot happen again.”
Developing a clear four-year strategy is also front-of-mind for all at the FIAU, with key pillars and a focus on keeping the unit effective and at the forefront of its sector. “Other jurisdictions are now looking to Malta as a point of reference, which is an excellent result. We want to stay on this path, so that the island’s reputation continues to be restored and it is once again seen as a very safe place to do business. We hope this will help us attract the new, legitimate business that will power Malta’s positive development into the future.”
But it isn’t just the FIAU that Kenneth believes needs a strong strategy, but the nation as a whole. “The public and private sectors must work together to act on the lessons learnt in the last few years. The private sector should not move ahead while the authorities stay behind, and all stakeholders should be on par to avoid repeating mistakes. We must move forward not back.”
And with this in mind, the Director is looking towards 2023 with resolute focus. Among the plans already in place, the unit will move to new premises to reflect its recent growth in human resources from 24 officers in 2017 to 136 to date. “And we hope to get to 174,” Kenneth says. “Of course, the move is a challenge, what with all the security concerns; so we are planning it very carefully. Meanwhile, effective automation is also top of our agenda, and our main objective is to automate our processes as much as possible in the next few years to help us with consistency, information security and better data management.”
And on top of that, the FIAU will also be synchronising the roles and responsibilities of its substantial team, to identify any risk areas and adjust accordingly.
“We know exactly where we need to be in the next few years and we are all working towards clear goals,” Kenneth stresses. “And I will say this again: it is a thorough team effort. We have managed to achieve a lot but it’s not about me – it’s about the whole team. We’re not perfect but we are trying to do our best in terms of excellence, which is why we are coordinating with all stakeholders to make this a joint drive to succeed.
“It is heart and purpose that have served us well on our mission so far, and which will continue to drive our mission into the future,” he adds.
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