The going has suddenly become tough, very tough if this country is truly determined to return to the Financial Action Task Force’s white list as soon as possible.
The government - everybody, for that matter - must first acknowledge that a problem, a very grave one, exists.
So, rather than playing down the greylisting decision, Prime Minister Robert Abela should take the cue of the Icelandic Justice Minister who, welcoming the news that her country had been taken off the list late last year, said: “Landing on a list like this has a major impact on the Icelandic economy, not just financial companies but almost all companies doing international business. If Iceland is to participate in the international business community, the government must ensure that it fulfils all the necessary conditions so that we can conduct business without unnecessary obstacles.”
When Iceland was greylisted, its government, institutions, companies and individuals worked systematically together to make the necessary improvements.
A public call to register the real owners of companies had a terrific response, with 93% of actual owners being recorded within a year.
That is the sort of approach the government needs to adopt, bringing together all stakeholders and communicating regularly and effectively. What will really matter to FATF and Moneyval, which, far from giving Malta a clean bill of health, is still demanding that the island strengthens measures to fight money laundering and the financing of terrorism, is that, rather than cosmetical touches to legislation, robust action on the ground is taken. The FATF has indicated three particular anti-money laundering issues that Malta has to address.
The financial services sector served Malta well and attracted much-needed foreign investment because both political parties stuck together and tried to ensure a functioning regulatory regime.
Regretfully, as time went by, but especially post-2013, weaknesses surfaced and risks escalated. For quite a while, enforcement, investigation and prosecution appeared to be lacking. Things, finally, started moving early last year following the political earthquake that ousted former prime minister Joseph Muscat who is primarily responsible for the mess we are in.
Before parliament rises for the summer recess, the prime minister and the leader of the opposition should make a joint declaration/statement solemnly pledging their commitment to work together on this matter
For once, the clock must be turned back. Soon after being returned to power after a break of 16 years, the Nationalist Party, in 1988, had decided to make Malta a serious and credible offshore business location. When Labour was re-elected in 1996, the new government too worked on the idea of developing a financial centre. It had appointed a committee to draw up a report on the subject and heading it was a former Nationalist MP, Mario Felice, Ironically, Malta’s greylisting happened right on the 10th anniversary of his demise.
A solid common front is, again, the way forward. Before parliament rises for the summer recess, the prime minister and the leader of the opposition should make a joint declaration/statement solemnly pledging their commitment to work together on this matter.
Whether it is a national task force, a working group or an independent oversight entity, some form of set-up incorporating all stakeholders and giving more weight to experts than politicians, needs to start functioning urgently.
The prime minister will, no doubt have to make some bold and tough decisions.
The tough must get going and, together, we need to get out of the greylisting at the first opportunity.
Bernard Grech should steer away from trying to score cheap political points though he is right to say that law-abiding companies and citizens do not deserve this collective punishment.
Equally important, government ministers and officials should refrain from trying to rally nationalistic support against the “foreigners” that imposed such sanctions. We brought this upon ourselves.