The Board of Governors of the Financial Intelligence Analysis Unit

The Board of Governors of the Financial Intelligence Analysis Unit (FIAU) has taken note of the various calls being made for the publication of confidential FIAU reports, and of the apparent general confusion and inaccurate understanding amongst the media and the public of the functions, role, and responsibilities of the Chairman and Board of Governors of the FIAU.

This is leading to a misguided expectation for action which neither the FIAU as an intelligence agency, nor the Chairman and other Board members are able to take legally and in practice.

Article 18 of the Prevention of Money Laundering Act establishes the distribution of duties of the FIAU. It provides that the Unit shall consist of a Board and a Director. The law is unequivocally clear that the Board is responsible for the policy to be adopted by the Unit and to be executed and pursued by the Director, and to ensure that the Director carries out that policy accordingly.

The Director is responsible for the execution of the policy established by the Board, and for carrying out all the functions of the Unit not attributed to the Board, subject to the general supervision of the Board.

The members of the Board are appointed by the Minister for Finance, and are nominated by the Attorney General, the Chairman of the Malta Financial Services Authority, the Governor of the Central Bank, and the Commissioner of Police.

Two members of the Board are appointed as Chairman and Deputy Chairman by the Prime Minister. The current Chairman is the Attorney General, and his predecessor prior to 2010 was also the Attorney General.

Ever since the appointment of the first Board of Governors of the FIAU in 2002, this legal provision was strictly interpreted and implemented such that there is a clear and distinct separation between the policy direction and oversight of the Board, and the operational activities conducted by the Director and his staff.

Accordingly, the Board does not involve itself in the operational activities of the FIAU. The Board is not provided with, it does not have access to, nor does it seek to obtain any information or documentation that the FIAU is in possession of in the exercise of its intelligence, analytical, and compliance supervision functions.

The Board receives regular feedback, statistics, and generic reports on the operations of the FIAU. Operational information in the possession of the FIAU has always been considered as secret and confidential, and the Board does not require access to it in order to carry out its responsibility as established by the Prevention of Money Laundering Act.

In practice, this means that the Board is never aware of suspicious transaction reports received by the FIAU or of their contents. The Board is not provided with, nor does it seek to, obtain case specific information on the intelligence work carried out by the FIAU, and is never aware of any information received or collected by the FIAU in its analytical and compliance work.

The Board is not informed when reports or any other disclosures are transmitted by the FIAU to the Police. These reports are not provided or otherwise made available to the Board, they are not approved by the Board, nor is the Board privy to their contents.

Similarly, compliance supervision reports sent by the FIAU to subject persons following on-site inspections are not provided or otherwise made available to the Board, and do not require the approval of the Board, nor is the Board privy to their contents.

These reports are also never published and at the stage when they are issued, they only address the relationship between the FIAU in its supervisory functions and the subject person concerned.

The separation between the Board and the operational function of the FIAU has always been maintained throughout the years, and is considered indispensable for the proper functioning of the FIAU as an intelligence agency and to ensure that the Director and his staff are able to operate within the strictest confidentiality and without any unnecessary interference.

As is already public knowledge, the FIAU has carried out work in connection with the revelations of the Panama Papers and the involvement of Maltese persons and companies. That work is still being pursued.

The Board confirms that it had been informed in generic terms by the Director of the FIAU about the said work. However, in line with the separation between the function of the Board and that of the Director, the Board was never provided with specific information on the intelligence work that was being carried out, nor with copies of reports transmitted to the Police.

The Board is not aware of the contents of these reports. Neither the Chairman nor any other member of the Board has ever read or has ever been in possession of any copy of these reports, nor does the Board have access to them.

The Board, in its policy making and supervisory role, is fully satisfied that the FIAU, through the work of the Director and staff, has carried out its functions and fulfilled its duties and has acted as required by law. The Prevention of Money Laundering Act does not give to the FIAU, (whether to the Chairman or other members of the Board or to the Director), any power to take any further action or to conduct criminal investigations or to instruct the Police in this respect.

The Board of the FIAU is bound by the strictest form of secrecy and confidentiality. Article 33 of the Prevention of Money Laundering Act expressly provides that any official or employee of the FIAU who discloses that an analysis is being carried out, or that information has been transmitted to the FIAU, or that information has been transmitted to the police for investigation, shall be guilty of an offence and liable on conviction to a fine or imprisonment.

Article 34 furthermore provides that the FIAU, and its officers, employees and agents, whether still in the service of the FIAU or not, shall not disclose any information relating to the affairs of the FIAU or of any person, which they have acquired in the performance of their duties or the exercise of their functions, except as provided in terms of law.

Article 34 further provides that the FIAU may disclose information to a foreign financial intelligence agency and to supervisory authorities, and may also disclose information to a competent authority investigating drug offences, money laundering, and funding of terrorism.

As already stated, the Chairman and members of the Board are not in possession of any reports that have been transmitted to the Police and, fully conscious of their responsibilities at law, believe that the FIAU is prohibited by law from making public any such report.

The Board however wishes to make it clear that the FIAU is legally empowered, to disclose information upon request to any Competent Authority (including an Inquiring Magistrate) investigating an offence of money laundering, and this in accordance with the provisions of Article 34(4) of the Prevention of Money Laundering Act.