Panama Papers Committee publishes final report; nine key findings from Malta visit

The PANA Committee has published its final report, with nine key findings with regards to their delegation's visit to Malta on 20 February this year.

The nine findings are: • The delegation could meet with most of the relevant persons (Minister of Finances, tax authorities, Financial Intelligence Analysis Unit, police ...). However, Keith Schembri, Prime Minister's Chief of Staff, refused at the last minute (at 2 pm) to meet the delegation and questioned the mandate of the Committee. Ninu Zammit, former Minister of Energy, did not reply to the invitation of the Chair of the Committee. • The Maltese tax system is very attractive and in line with current international and EU standards as regards harmful tax competition. The Finance Minister, however, admitted that the Maltese tax system can be prone to abuse and confirmed that Malta disagreed with Commission proposals on specific tax issues (e.g. public CBCR, CCCTB). • There is a high number of intermediaries from Malta involved in the Panama papers, with some intermediaries having worked with politically exposed persons in Malta. One interme- diary in particular - Nexia BT - refused to appear and did not satisfactorily answer the questions raised in writing. • Malta has transposed EU rules and respects OECD standards in terms of transparency, fight against tax fraud and money laundering. • The institutions in charge of implementing and enforcing rules as regards tax fraud and money laundering are highly politicized. The press is also highly politicized. • The police is in charge of prosecuting the investigations carried out by the FIAU. There are reasons to believe that it is not well equipped to fulfil its task optimally, possibly suggesting a case of maladministration. Especially, the number of convictions and confiscations seems extremely low in relation to the average number of reports sent to the police by the FIAU (during the period 20132015). • The tax compliance unit mentioned a lack of resources to comply with the spontaneous exchange of information required by the EU Directive on Administrative Cooperation. Other key findings: • Observes that a number of intermediaries, such the Pilatus bank in Malta, did not adequately carry out the mandato- ry enhanced CDD measures, whether upon the establishment of the business relationship with their clients or during that business relationship, even when there was a suspicion of money laundering; highlights, therefore, the failure to report or uneven reporting on the part of obliged entities of suspected cases of money laundering to the competent FIUs • Notes that at least one Member State - Malta - had a government minister named among the PEPs mentioned in the Panama Papers; notes that for most of the Member States that the Committee visited with a fact-finding mission, inquiries were started after the Panama Papers revelations; regrets, however, that in some countries, including Malta, there has been no police investigation despite evidence from the FIU of serious risks of money laundering; • Regrets that this lack of investigation has prevented the possibility of identifying, and if necessary sanctioning, intermediaries in Malta who may not have been compliant with their obligations, including CDD; draws attention to the online gambling sector and its licensing procedures in Malta, which may not be compliant with the law, as online gambling is a high-risk sector due to the huge volumes of transactions/financial flows and non-face to face elements, as identified in its supranational risks assessment ; condemns the failure of the Commission to investigate further as regards possible noncompliance by Malta with the AMLD, despite this being brought to its attention; • Welcomes the answers that were provided by the Finance and Justice Ministers of 25 Member States in response to the questionnaire sent by the Committee; regrets, however, the fact that Malta and Hungary have failed to respond and that Malta, which held the rotating Presidency, was particularly uncooperative. http://www.europarl.europa.eu /cmsdata/131460/2017-11-08 PANA Final Report.pdf