The responsibilities of senior management within financial institutions in terms of the Prevention of Money Laundering Act (Chapter 373 of the Laws of Malta) and related or subsidiary legislation

Abstract

Money laundering is the process by which money gained illegally is disguised and moved across the world through different transactions in order to try and legitimize their criminal origins. Financial institutions inadvertently serve as a conduit through which such laundered money is integrated into the system. This study considers senior management responsibility within financial institutions in the role as a gatekeeper to help combat money laundering within its organization. It goes on to analyse the responsibilities of senior management in light of the main regulation governing this sector, which is the Prevention of Money Laundering Act Chapter 373 of the Laws of Malta and subsidiary legislation 373.01, the Prevention of Money Laundering, and Funding of Terrorism Regulations. The aim of this study is to explore whether, by taking the necessary measures and abiding by the relevant laws, senior management within financial institutions can prevent activities related to money laundering from happening within the organization. For the purpose of this study, significant importance is given to money laundering related cases investigated by the Financial Intelligence Analysis Unit (FIAU). It becomes apparent that when senior management acts in good faith and respects the regulations in place, illicit activities can be prevented or at least curtailed.