IDEAS home Printed from https://ideas.repec.org/a/ers/journl/vxxviiiy2025i3p518-530.html
   My bibliography  Save this article

From Checklists to Change: FATF’s Risk-Based Approach and Its Impact on Malta’s AML Framework

Author

Listed:
  • Rafal Balina
  • Marta Spyra
  • Filip Rozynski
  • Olga Podlinska

Abstract

Purpose: This article explores the global shift in Anti-Money Laundering (AML) regulation from a rule-based compliance model to a risk-based, outcome-driven paradigm, as exemplified by the evolving standards of the Financial Action Task Force (FATF). Design/Methodology/Approach: By analyzing the experiences of Malta, the United Arab Emirates (UAE), and Iceland—jurisdictions subjected to FATF greylisting and subsequent reforms—we assess how regulatory effectiveness is now measured not by the presence of formal frameworks, but by the demonstrable reduction of financial crime. Integrating insights from regulatory theory, institutional behavior, and international political economy, the article highlights the practical implications of the Risk-Based Approach (RBA) for financial institutions, compliance professionals, and policymakers. Findings: The study emphasizes the need for adaptive systems, cultural change, and integrated enforcement to meet new global AML expectations. The comparative analysis illustrates that successful compliance under RBA demands more than technical alignment—it requires strategic engagement, operational resilience, and a measurable commitment to transparency and accountability. Practical implications: The findings underscore that effective AML compliance in the era of the Risk-Based Approach (RBA) requires financial institutions to move beyond box-ticking exercises and adopt dynamic, intelligence-led frameworks. Regulators must develop adaptive supervisory models, invest in inter-agency coordination, and foster cultures of accountability. For policymakers, aligning AML reforms with broader governance and development goals is essential, particularly in jurisdictions vulnerable to FATF scrutiny. The study also signals to compliance professionals the growing need for strategic thinking, cross-sector expertise, and proactive risk assessment capabilities. Originality Value: This article provides one of the first comparative, theory-informed analyses of how FATF’s shift toward outcome-based evaluation reshapes national responses to greylisting. By integrating case studies with insights from regulatory theory and political economy, it highlights the deeper institutional and strategic transformations required under the Risk-Based Approach (RBA). The paper offers a novel perspective on the intersection of global financial governance, national sovereignty, and compliance effectiveness, with direct relevance for scholars, regulators, and practitioners.

Suggested Citation

  • Rafal Balina & Marta Spyra & Filip Rozynski & Olga Podlinska, 2025. "From Checklists to Change: FATF’s Risk-Based Approach and Its Impact on Malta’s AML Framework," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 518-530.
  • Handle: RePEc:ers:journl:v:xxviii:y:2025:i:3:p:518-530
    as

    Download full text from publisher

    File URL: https://ersj.eu/journal/4058/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Julia Black, 2008. "Constructing and contesting legitimacy and accountability in polycentric regulatory regimes," Regulation & Governance, John Wiley & Sons, vol. 2(2), pages 137-164, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tetteh Asare, Emmanuel & Burton, Bruce & Dunne, Theresa, 2024. "Hegemonic influence and selectivity in financial accountability discharge: Evidence from Ghana’s oil and gas sector," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 100(C).
    2. Ayako Hirata, 2021. "How networks among frontline offices influence regulatory enforcement: Diffusion and justification of interpretation of risk," Regulation & Governance, John Wiley & Sons, vol. 15(4), pages 1388-1405, October.
    3. Daniel Fitzpatrick & Rebecca Monson, 2022. "Property rights and climate migration: Adaptive governance in the South Pacific," Regulation & Governance, John Wiley & Sons, vol. 16(2), pages 519-535, April.
    4. Josefina Erikson & Oscar L. Larsson, 2022. "Beyond client criminalization: Analyzing collaborative governance arrangements for combatting prostitution and trafficking in Sweden," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 818-835, July.
    5. Cyril Benoît, 2021. "Politicians, regulators, and regulatory governance: The neglected sides of the story," Regulation & Governance, John Wiley & Sons, vol. 15(S1), pages 8-22, November.
    6. Sheila Killian & Philip O'Regan & Ruth Lynch & Martin Laheen & Dionysios Karavidas, 2022. "Regulating havens: The role of hard and soft governance of tax experts in conditions of secrecy and low regulation," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 722-737, July.
    7. Hervé Kohler & Christine Pochet & Anne Le Manh, 2021. "Auditors as intermediaries in the endogenization of an accounting standard: The case of IFRS 15 within the telecom industry," Post-Print hal-03337420, HAL.
    8. Yugank Goyal, 2022. "Responsibilization through regulatory intermediaries in informal markets: Examining the governance of prostitution in India," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 858-874, July.
    9. Hogarth, Stuart & Löblová, Olga, 2022. "Regulatory niches: Diagnostic reform as a process of fragmented expansion. Evidence from the UK 1990–2018," Social Science & Medicine, Elsevier, vol. 304(C).
    10. Kristina Murphy & Tom R. Tyler & Amy Curtis, 2009. "Nurturing regulatory compliance: Is procedural justice effective when people question the legitimacy of the law?," Regulation & Governance, John Wiley & Sons, vol. 3(1), pages 1-26, March.
    11. Klaus Dingwerth, 2017. "Field Recognition and the State Prerogative: Why Democratic Legitimation Recedes in Private Transnational Sustainability Regulation," Politics and Governance, Cogitatio Press, vol. 5(1), pages 75-84.
    12. repec:osf:socarx:z4ja7_v1 is not listed on IDEAS
    13. Emily Webster, 2022. "Regulating humanity's impact on the earth: The promise of transnational environmental law," Global Policy, London School of Economics and Political Science, vol. 13(S3), pages 38-48, December.
    14. Hellenkamp, Detlef, 2025. "Regulatorische Agenda 2025+ und deren Ausblick: Zwischen Komplexität und Notwendigkeit – Eine kritische Analyse des europäischen Bankensektors [Regulatory Agenda 2025 and Its Outlook: Between Compl," MPRA Paper 125915, University Library of Munich, Germany.
    15. Kyle S. Herman, 2024. "Intermediaries and complexity: assessing emissions-based governance in the European Union’s EU-ETS," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 24(4), pages 539-564, December.
    16. Rasul Ahmed Minja & Stefano Ponte & Asubisye Mwamfupe & Christine Noe & Daniel Brockington, 2023. "The Legitimacy of Sustainability Initiatives in Tanzania," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(3), pages 453-482, June.
    17. Gillian K. Hadfield & Jack Clark, 2023. "Regulatory Markets: The Future of AI Governance," Papers 2304.04914, arXiv.org, revised Apr 2023.
    18. Diana M. Bowman & Graeme A. Hodge, 2009. "Counting on codes: An examination of transnational codes as a regulatory governance mechanism for nanotechnologies," Regulation & Governance, John Wiley & Sons, vol. 3(2), pages 145-164, June.
    19. Kevin Kolben, 2017. "A Supply Chain Approach to Trade and Labor Provisions," Politics and Governance, Cogitatio Press, vol. 5(4), pages 60-68.
    20. Katarína Šipulová & Samuel Spáč & David Kosař & Tereza Papoušková & Viktor Derka, 2023. "Judicial Self‐Governance Index: Towards better understanding of the role of judges in governing the judiciary," Regulation & Governance, John Wiley & Sons, vol. 17(1), pages 22-42, January.
    21. Warren, Rebecca, 2024. "Maintaining and extending hegemony: The politics of accounting standard setting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 99(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:xxviii:y:2025:i:3:p:518-530. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ersj.eu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.