An “overwhelming majority” of countries expressed opposition to Malta being
placed on a global watchdog’s financial crime greylist.
Sources briefed on the confidential greylisting discussions in the past week said numerous FATF member countries were of the view that Malta had done enough to avoid being placed on the list of jurisdictions deemed untrustworthy in the fight against financial crime. Despite having majority support, Malta’s efforts to
remain off the greylist were torpedoed by the US, UK and Germany.
“The FATF does not take decisions by a vote. Decisions are taken by consensus which is neither based on unanimity nor a majority. When a strong minority opposes, it can block a consensus, even against a majority,” one source explained.
With the US, in particular, being an influential player within the FATF, Malta’s attempts to avoid the damaging greylisting were ultimately rebuffed by the three countries.
Another source said the greylisting process was more “political” rather than the purely technical exercise it is meant to be, with the FATF opting to “punish” Malta for its past sins.
The greylisting process was more “political” rather than the purely technical exercise it is meant to be, with the FATF opting to “punish” Malta for its past sins
However, the fact that traditional allies like the UK turned their backs on Malta is a further indicator of the damage done to the country’s reputation after years of turning a blind eye to corruption and financial crimes, notwithstanding recent efforts to atone for this.
The government on Friday thanked the “numerous jurisdictions” that supported Malta and put forward the view that the country did indeed make sufficient and tangible progress in its fight against financial crime.
FATF president Marcus Pleyer justified the greylisting by explaining how the body had analysed not just technical implementation of anti-money laundering laws on the statute books but also their effectiveness on the ground.
That assessment method differs from the Council of Europe’s Moneyval, he noted, which is focused on the country’s legal framework.
Malta passed a Moneyval assessment earlier this year, with the Council of Europe finding the country no longer “non-compliant” with its recommendations.
The assessment was a huge improvement on Moneyval 2019 verdict, which found serious issues with Malta’s will to battle corruption and money-laundering.
The FATF’s decision means Malta must now abide by a three-point action plan before it can be taken off the greylist.
At the heart of that plan is an improved commitment to effectively fight tax crimes by using intelligence to catch tax cheats, and better policing of ultimate beneficial ownership rules.
In a warning shot to the government, Pleyer said the Maltese authorities must not downplay the importance of these measures.
While the greylisting does not imply any legal or economic sanctions, it warns other countries to be more careful in their financial dealings with Malta.
Haiti, the Philippines and South Sudan were also greylisted along with Malta.
Prime Minister Robert Abela has labelled the greylisting as “unjust”.
In a statement following the FATF press conference, the government said that the initial 2019 evaluation had listed 58 recommended actions and that over the subsequent 18 months, all but three of those had been addressed.