In this article, I want to highlight the alarm rung by Moneyval in its Fifth Round Mutual Evaluation Report on Malta, which is based on the onsite visit between 5th and 16th November 2018.
I must highlight that, contrary to a general perception that this is a Report made by the European Union, this Report is made by the Council of Europe which is made up of 47 members.
The Report is prepared by a Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, known as MONEYVAL.
The report, in one of its conclusions, states that: “Malta should ensure that the supervisory authorities apply proportionate, dissuasive and effective sanctions and that these are not delayed by judicial review”.
In a few words, as highlighted in an editorial of the Times of Malta, expertise can be bought, people can be trained, and law enforcement authorities can be empowered to act independently, but what matters is the political will to do what is right rather than close an eye to abuse.
In order to give an indication of what is happening in our institutions, I must mention the banking sector, which should be the foundation of Malta’s financial services and the flag bearer of its reputation and, in this respect, I am giving hereunder an indication of the political thread within the governance set-up of Bank of Valletta, which is the largest bank in Malta and the main banking player in the financial services sector:
- Mr Taddeo Scerri was appointed by the Government as Chairman of the Bank in December 2016, after serving as Director since April 2013. Mr Scerri had served for many years as auditor of the Malta Labour Party.
- Mr Stephen Agius was appointed as Director in December 2016. He is the brother of Chris Agius, Parliamentary Secretary for Planning and the Property Market.
- Ms Anita Mangion was appointed as Director in December 2016, and is Deputy Chairperson of the Compliance and Crime Prevention Committee. She is the daughter-in-law of Notary Charles Mangion, a former Government Minister, former Chairman of Enemalta, and now, Chairman of Air Malta.
- Mr James Grech was appointed as Director in December 2014, and is the Executive Head of the foreign bank relationships Department. He contested the European Parliament elections on the Labour Party ticket.
- Mr Anthony Scicluna is the Bank’s Chief Human Resources Officer, and is the brother-in-law of the Chairman, Mr Taddeo Scerri.
- Mr Mark Scicluna is a Bank Executive and the brother of the Chief Human Resources Officer, Mr Anthony Scicluna. He is married to the daughter of the President of Malta, Dr George Vella. The sister of Mr Mark Scicluna’s wife (another daughter of the President) is married to Mr Joe Cuschieri, the CEO of the Malta Financial Services Authority (MFSA). Mr Cuschieri moved to the MFSA after serving as Chairman of the Gaming Authority, the Regulator of the Gaming Sector which was also given special mention in the report due to its being highly vulnerable to money laundering.
It may be appropriate to highlight that, on 25th June 2019, on the instructions of the European Central Bank (ECB), the MFSA had written to the Bank expressing “serious concern” about managerial shortcomings in its operations.