Malta: How Crucial Is The Role Of Risk And Compliance Officers Nowadays?

Last Updated: 29 March 2019
Article by Finance Malta

More recently we have noticed significant changes regarding sectioned entities and jurisdictions with announcements from the President of the United States of America, the regime changes in Iran, restrictions or even exclusions of collaborations with Politically Exposed Persons arising, and the list of such restrictions is getting longer day by day. 

Overall, is there any definition for a "safe" co-operation which companies can follow to protect themselves? Is there any available list of "blacklisted" entities (being either legal or physical) with whom any provision or receipt of services and/or goods is prohibited? And the most importantly, where can such information be retrieved to make the decision-making process easier for compliance officers before any cooperation is concluded?

These are some of the numerous unanswered questions that are, however, of utmost importance to the protection and sustainability of any organization.

It is a fact that global sanction lists are continuously increasing, affecting therefore the rules for co-operation with some states that are now considered to be high risk. It is worth noting that the term "states" in that case, is not restricted to nations or jurisdictions, but refers also to physical and legal entities, for various reasons.

It would be fair to say that the use of digital technology has greatly improved the research process in general and even more when referring to the procedure of getting information on all the aforementioned. In particular, research process has now become significantly efficient through the use of global news sites that are updated in real-time, as well as the ability of reviewing up-to-date announcements; fines and remarks; amongst others, from the regulatory authorities; ministerial offices; central banks; and so on.

Although digital technology has been beneficial in many ways when it comes to the ability of retrieving any information through global sources, there is however the opposite side which should also be considered so as to evaluate whether any information is considered free or biased. The right to freedom of opinion, enables everyone to express their own views, thus transforming the global network into a forum of public debate and multiple opinions. Consequently, even-though such search engines make the research process easier and more efficient, it is highly crucial to know whether all those opinions, articles, or announcements are reliable.

With the ever-increasing compliance requirements from the regulatory authorities with regard to the risk; compliance and monitoring procedures, either of the current or the prospective clientele of each organization, almost (if not) all legal entities are, by law, obliged to monitor their clients in order to combat money laundering and terrorism financing activities [See relevant European and International Directives for further information].

Importance of KYC and the role of Compliance Officers

In formal terms, money laundering is defined as the process by which the proceeds of crime are channeled through the economy/financial system in a way which is intended to conceal the true origin and ownership of the proceeds of criminal activity.

Can Money Laundering be prevented?

Although money laundering is a fraudulent activity, it can sometimes be prevented if all necessary actions are carried out, including Client Due Diligence and the well-known KYC process.

Know Your Customer (KYC) was initially a mandatory process for all banks to prevent money laundering, terrorist financing, manage risks and financial frauds. KYC regulations are, however, increasingly becoming critical issues for just about any institution that touches money. Thus, while banks are required to comply with KYC to limit fraud, they also pass on that requirement to those with whom they do business (not only the bank itself).

It is generally acceptable that the compliance officer's role is one of the most crucial within a firm, as the risk and particularly reputational risk, is in their hands. So, in order to reduce such risks, due diligence and KYC screening should always be performed.  Amongst other responsibilities, compliance officers are required to investigate each and every client, both individuals and companies, and to ensure that the subject entity was not involved in money laundering, terrorist financing or any other related offences, keeping in place all the required evidence.

Numerous cases were identified recently in relation to money laundering scandals. Apart from monetary fines, there was a significant adverse impact on each entity's reputation. From the most recent scandal of Danske Bank in 2018, the bank's share price dropped by 11% with a dramatic 40% drop of the entity's market value. The case of the Commonwealth Bank saw shares drop by around 4%, while Raiffeisen Bank International AG's fine for money laundering activities led to a sharp drop equal to 11% of the bank's stock price.

These are only some of the numerous recent examples of money laundering scandals in the European Union market, showing the respective impact that such events had on each organization's reputation and market value.

Consequently, reputational risk is of utmost importance and the need to get to know your clients is a significantly important aspect and the necessary actions should be in place by each organization, being regulated or not.

Author:  InfoCredit Group Ltd.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions