FATF’s decision to grey list Malta ‘unjust and undeserved,’ PM says

• PN calls on government to set up national task force

The Financial Action Task Force (FATF) yesterday voted to grey list Malta, in a decision described by Prime Minister Robert Abela a “unjust and undeserved.”

The move, which has been widely expected, could have negative consequences on Malta’s financial services and banking sectors, as well as on its attractiveness to foreign investment.

The result will not be officially communicated yesterday since the ballot was taken in secret, as is customary at the FATF. Malta did not have a vote.

Last week it emerged that the UK, the US and Germany wanted Malta to be grey listed – a term which means that the country will be placed under increased monitoring – despite the country having passed an equally arduous Moneyval assessment in March.

Senior government figures including Finance Minister Clyde Caruana and Foreign Affairs Minister Evarist Bartolo spent the past few days lobbying to turn the table in Malta’s favour. Despite these efforts, however, Malta did not garner the required support.

It is understood that the FATF also voted to grey list Romania. This means that the two countries will become the first two EU Member States to be placed on the grey list.

Finance Minister Clyde Caruana hinted last week that the motive behind the lack of support towards Malta could be “political.” This, sources said, could include Malta using its veto powers at EU-level against countries who failed to back it at the FATF.

We need ‘Team Malta’ spirit – Abela

Addressing a press conference yesterday evening, Abela said: “I feel that Malta did not deserve such a result. While I feel that the decision was unjust, Malta will continue building on the reforms it has implemented so far. We are doing this out of conviction, we believe in strong governance. This is a sacrosanct principle for us.”

“Entities involved in the fight against money laundering defended Malta’s case and explained all that we have achieved over the past years. At no point did we forget Malta’s interest or take a position that can weaken the prosperity of Maltese families and businesses,” the PM said.

The PM said the Moneyval report was a positive one that showed that Malta is among the most compliant countries. “There was no instance where Malta was found to be noncompliant or semi-compliant.”

More than ever, we need to work with a spirit of ‘Team Malta,’ Abela continued.

“There might be those who choose to play the partisan game. That is up to them. On our part, we will look ahead and keep working to strengthen this sector.”

Finance Minister Clyde Caruana said over the past days he conveyed the message that Malta has done a lot and will continue working to strengthen its anti-money laundering framework in the coming months. “We did this so that the partners we work with see in us a loyal partner.”

The Finance Ministry will continue working to ensure that, in the coming weeks, Malta satisfies all criteria, and the country exits the FATF procedure.

Caruana assured that he will not be downgrading the country’s financial targets and figures. The government, he said, will continue attracting investment and creating jobs, just like it has done over the past 8 years. He said the government will mitigate the effects of the FATF verdict “in the best possible way.”

Caruana said he is not anticipating any “shocks” on the country’s finances, and Malta is expected to reach its targets.

Clyde Caruana downplayed concerns, saying that any effects will not be felt overnight. “What we are speaking about is a process that the country will be following to address some shortcomings.”

The PM conceded that episodes like the Panama Papers had not helped, just like other episodes in previous years had also not helped. Asked if it was time to scrap the passport scheme, Abela said the programme had been greatly improved, adding that he would say more once the official verdict was out.

On whether an apology was warranted, Abela said the important thing is that the government continues working and building on its own recent reforms.

Asked whether the government would now call a general election, Abela said the PL has a mandate to govern until 2022. On calls for the resignation of Central Bank governor Edward Scicluna, formerly Malta’s Finance Minister, Abela said now is not the time to point fingers. Malta, he said, had done all it had been asked to do.

Grech calls for national task force

Earlier, Opposition Leader Bernard Grech called on the government to work with the opposition by setting up a national task force with the goal of placing Malta back on the FATF white list as soon as possible. Grech said he was very disappointed with such a vote.

“This is a punishment on all the Maltese people. This is not the time to dwell on why we ended up in this situation but to work together for the national consensus.”

Grech remarked that “this will be made possible if we work together at a national level with the participation of both sides of the room, together with partners and financial experts in order to implement it more convincingly and with a national consensus. This will seek to limit the long-term damage on Malta’s economy.”