Edward Scicluna has distanced himself from the Pilatus scandal, arguing he never defended the shuttered bank.
“I admit to defending my country and its regulatory institutions when I felt they were being unfairly treated by the European institutions. But I never defended a particular bank, least of all Pilatus”, the former finance minister told Times of Malta.
In the wake of a record €4.9 million fine and criminal proceedings against the bank, the Nationalist opposition has called for Scicluna to step down as governor of the central bank.
The bank’s former chairman, Ali Sadr was known to be on friendly terms with former prime minister Joseph Muscat and his top aide, Keith Schembri.
Action was only taken against the bank upon Sadr’s arrest in the US in 2018, despite concerns about its operations being raised by Malta’s Financial Intelligence Analysis Unit (FIAU) two years earlier.
Scicluna, however, defended his record as finance minister.
He expressed his satisfaction that the FIAU, which used to fall under his remit, had finally completed its work in relation to Pilatus.
The central bank governor pointed out that the EU has yet to see a proper overarching European regulatory institution when it came to combatting money laundering, which is transboundary in nature.
Scicluna said intelligence analysis leading to charges are known to be laborious and time-consuming the world over and one cannot expect quick results in the area.
'I was also instrumental'
“As an ex-minister, I am proud to have seen the FIAU being given a significantly bigger budget and staff complement to the one I found on my being appointed minister.
“I was also instrumental in my country carrying out its first national risk assessment with respect to anti-money laundering/terrorism funding activity on the island, way back in 2013,” Scicluna said.
The former finance minister said he had also given his full moral support to current FIAU director, Kenneth Farrugia and former FIAU director, Manfred Galdes during the most difficult periods of their directorship to do what is right.
“This was attested by both directors during the Daphne Caruana Galizia inquiry”.
Scicluna had infamously cast doubts on the FIAU’s work following the June 2017 election, questioning whether certain reports by the anti-money laundering unit about Pilatus and the former OPM chief of staff, Schembri had been “written to be leaked”.
The FIAU, in 2016, decided there was no legal basis to sanction the bank, despite raising concerns in a leaked compliance report about its lax money-laundering controls.
This failure to act had earned the unit a rebuke from the European banking authority, which said the FIAU had breached the EU’s anti-money laundering laws due to its lack of action.
The unit set about remedying these failures in 2018, seizing all the bank’s data, including recordings of conversations between bank employees and clients.
It announced this week that it had fined the bank a record €4.9 million for letting millions of euros flow through Malta unchecked.