A number of international banks were declining to do business with Maltese nationals as they viewed the jurisdiction to be too risky, sources within Malta’s financial institutions warned.

Sources from the financial sector and banking regulators confirmed they had received reports from Maltese nationals and Malta-based businesses after overseas banks declined to provide them with services.

“This is a reality. In part, it is a result of the negative perception of Malta in the international community and, in part, it is also the ripple effect of the reaction of large banks that have themselves been embroiled in some sort of scandal in recent years,” according to a senior regulator.

One Maltese national told Times of Malta he had recently been informed by CaixaBank, Spain’s third largest lender, that he would not be able to provide him with a bank account as Malta was viewed by the bank as a risky jurisdiction.

A spokeswoman for the bank said that as a bank following strict compliance rules, CaixaBank analysed all jurisdictions according to internal and external economic and banking data.

“The category into which Malta is included (jurisdiction with risk) means that CaixaBank, in accordance to what is established in Spanish and European regulations with this kind of jurisdictions, is applying enhanced due diligence with transactions involving Maltese nationals,” she said.

Negative perception of Malta in the community

The bank spokeswoman, however, added that there was “no restriction at all on doing business with individuals or companies with Maltese nationality or residence”.

Another Maltese national said this had happened to him in the Netherlands at multiple banks, which was one of the main reasons why he had decided to relocate to France.

He conceded that he did, however, operate in a risky digital sector and had found it tough to bank across Europe.

This, local stakeholders said, had been happening for several months as reports and complaints from Maltese nationals overseas continued to trickle in. 

Earlier this month, Bank of Valletta’s newly-appointed chief executive officer, Rick Hunkin, told Times of Malta that the island was increasingly being viewed as a high-risk jurisdiction.

Malta does not feature on the blacklist published by the inter-governmental organisation known as the Financial Action Task Force.

However, Malta’s own internal risk assessment found that the island had a high risk of being used for money laundering and a “medium-high” risk of terrorist financing.

The 2017 assessment found the country to be at a “high” risk of receiving foreign proceeds of crime and a “medium-high” risk of local crime.

And the Council of Europe’s anti-money laundering experts, MoneyVal, have given Malta a short window to get matters in order or risk possible blacklisting. 

Last year, Malta failed a MoneyVal assessment of its anti-money laundering legislation and enforcement. 

The government set up a team to implement the recommendations made in the final MoneyVal assessment report that was published in September.