Malta is heading into a final vote on whether or not it should be put on the money laundering offenders' list without a clean bill of health, after international experts gave the island mixed reviews on Tuesday.
Evaluators from the Financial Action Task Force (FATF) met in Paris on Tuesday afternoon to decide on a recommendation over whether or not Malta should be greylisted - a term that signals to the international community that a country is not deemed trustworthy in the fight against money laundering.
Sources said the assessors did not reach an unanimous decision on whether or not to recommend Malta be put on the list.
The FATF, the leading global anti-money laundering watchdog, will now hold a plenary, made up of delegates from some 200 jurisdictions, to take a final vote on Malta’s future. The vote is slated for June 23, 2021.
The plenary delegates can either decide to go ahead with greylisting Malta, or it can ask another entity within the Council of Europe to carry out further monitoring of the country.
This monitoring would mean more hand-holding for local regulators but would not cause any major reputational damage to the country that Malta fears could be brought on by greylisting.
Greylisting's reputational damage
The FATF grey list does not imply any specific sanctions, however, it does serve as a warning to the international community that the country is not doing enough to stop major financial crime and therefore cannot be trusted.
There has never been an EU member state on the grey list before and being placed on it could seriously impact Malta’s ability to do business as well as its attractiveness to foreign investors.
The island has been facing the prospect of potential greylisting since 2018, when the Council of Europe’s so-called MoneyVal experts started reviewing the country’s law enforcement and administrative regime.
The review came as the country was grappling with the fall-out from major corruption scandals that stuck at the heart of government.
Since then, experts from the FATF have been taking a long hard look at Malta’s fight on financial crime.