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FIAU: Suspicious transaction reports up 19% in 2022

Over 8,700 suspicious transaction reports were filed across financial sectors in 2022, up 19% from the previous year, according to the FIAU’s latest annual report.

The report shows that, from the 8,700 suspicious reports filed in 2022, around 58% of those reports were filed by remote gaming companies.

Suspicious transaction reports (STR) are received by the anti-money laundering agency from banks, legal professionals, gaming companies, casinos, or real estate agencies, when large amounts of money and their source cannot be accounted for.

There was a large spike in suspicious reports filed by virtual financial assets (VFAs) agents. In 2022, VFAs filed 965 suspicious reports. Back in 2019, they only filed eight reports.

In 2021 they were responsible for 411 suspicious reports, while in 2020 they filed 61 reports.

There was also a considerable year-on-year spike in suspicious reports by competent authorities. While 16 reports were filed by competent authorities in 2020 and 2021 combined, the number of filed reports jumped to 60 in 2022.

A competent authority is responsible for the regulation and supervision of investment, banking or insurance entities. In Malta, the national competent authority is the MFSA.

There was also an increase in FIAU-generated cases. There were 154 such cases filed in 2022, while in the previous year there were 105 reports. In the two years prior, the number of reports filed stood at 35 and 32.

The thousands of reports received or generated by the FIAU in 2022 concerned 11,492 natural persons and 3,384 legal persons.  This is a 5% year-on-year increase in the number of legal entities about which a report was received.

Among the natural persons reported, 15% originated from the United States, while 13% originated from Malta. The rest originated from Canada, India, Finland, the UK, Germany, Austria, Ireland and Brazil.

Meanwhile, 28% of reported legal persons originated from Malta.

Among the reasons for suspicion in the reports, unknown sources of wealth or funds was the most prevalent, with 53% of reports citing this as the main reason for suspicion.

The second most common reason was that the transaction activity was unexplained or inconsistent with the known customer profile. This was followed by a refusal to provide source of wealth or funds information.

In the majority of cases, the main suspected predicate offence could not be established. However, in 32% of cases, the suspected predicate offence was fraud. Tax evasion was the main suspected offence in 16% of cases.