The prospect that the Financial Action Task Force may not greylist Malta following progress made in local efforts to curb money laundering is the best piece of good news that the country is likely to have this year.
For years, Malta was perceived to disregard anti-financial crime regulations defined by the FATF, the intergovernmental body that sets global anti-money laundering standards.
Sufficient progress may now have been achieved in strengthening the anti-money laundering process to avoid Malta’s greylisting.
The tangled web spun by some rogue politicians and their business cronies has led to money laundering, corruption, state capture, the plundering of taxpayers’ money and has even resulted in the assassination of a journalist.
To destroy this web, war is needed on various fronts. These include enacting stricter anti-financial crime laws, the empowerment of law enforcement agencies like the police and beefing up the oversight functions in the Financial Intelligence Analysis Unit (FIAU) and the Malta Financial Services Authority (MFSA).
Perhaps the most crucial development in the last several months has been the determination to hold corrupt money laundering offenders accountable by bringing them to justice when sufficient evidence warrants such action.
The fight against financial crime will never be won entirely as long as corrupt politicians and their cronies find ways and means to undermine the checks and balances needed to prevent the abuse of power.
Foreign Minister Evarist Bartolo objected to the censure of the Maltese government by the European Parliament, which sent a clear signal that the country needs to do more to identify the criminal masterminds that have caused so much damage to Malta’s image.
Bartolo argues that Malta is being mistreated because it is a small country.
His attitude is fallacious.
NatWest Ban, one of Britain’s largest Banks, is currently appearing in a London court to respond to charges that it failed to properly scrutinise a gold-dealing client that deposited large sums of money with the bank, most of it in cash.
Last year, global banks, including Capital One in the US, were fined $10.4 billion for failing to report hundreds of thousands of suspicious transactions.
When a team from the Financial Action Task Force visited Malta recently, it noted the progress made in the last several months to upgrade anti-financial crime efforts. One senior regulator who attended the meetings with the FATF team told Times of Malta: “The truth is that, yes, we still have problems, the jurisdiction is far from perfect, but this is a process and FATF did recognise the significant body of work that has been carried out.”
A living process usually has a beginning but no end as it needs to be updated constantly to achieve its objective.
Three big problems make the fight against financial crime daunting: a lack of transparency, a lack of collaboration and a lack of resources.
For instance, laws need to be updated constantly to ensure that it is not just banks that act as effective gatekeepers to prevent the rinsing of dirty money in the financial system. Lawyers, accountants and financial consultants must have obligations that are just as onerous in order to prevent attempts by rogue politicians and corrupt businesspeople to launder their illicit gains.
Now that Malta appears to be clawing itself out of the hole it had dug for itself, the fight against financial crime should not be allowed to sink down the list of national priorities again.
The work to regain the full trust of international investors, regulators and institutions in Malta’s ability to always do what is right has just started.