EBA confirms ‘preliminary enquiry’ in Malta after Pilatus chairman’s arrest

The European Banking Authority (EBA) has confirmed that it is “currently carrying out a preliminary enquiry in Malta,” adding that at this stage, it cannot comment any further.

Questions were sent by The Malta Independent to the EBA in the wake of news that Pilatus Bank chairman Ali Sadr Hashemi Nejad has been arrested in the US for circumventing sanctions against Iran.

He is accused of facilitating the transfer of $115 million in Venezuelan money to Iran via the US banking system to build 7,000 housing units.

Sadr was the chairman of Maltese-registered Pilatus Bank, Ta’ Xbiex, which was at the centre of a major scandal last year. Since the news of his arrest, the Malta Financial Services Authority (MFSA) has called for his removal as chairman, and has prevented the bank from carrying out any transactions for the time being.

In the EBA’s reply, it stressed that it had no direct supervision or enforcement powers towards firms, adding that it set standards and could investigate whether a national authority was in breach of EU law.

Twenty-two MEPs from across the political divide have penned a letter to express their concern about Pilatus Bank, licensed in Malta in January 2014, and its operation in the EU.

MEPs forming part of the PANA Committee and of the mission sent to Malta last November to investigate the rule of law said that leaked information pointed towards Pilatus Bank being “at the centre of illicit financial flows from Malta’s citizenship-byinvestment scheme, the sale of state assets, and unexplained inflows from high-risk jurisdictions like Azerbaijan to Maltese politically exposed figures.”

PN MEP David Casa called on MFSA chairman Joe Bannister to revoke Pilatus Bank’s licence, adding that failure to do so would result in him writing to the European Central Bank and the EBA to investigate.