Swedbank categorises Malta as ‘high risk’, leaked e-mails show

Swedbank AB, a major international player with 9.5 million retail customers and 622,000 corporate customers, is now considering Malta to be a ‘high risk’ category, e-mails leaked to The Malta Independent on Sunday shows.

A client who attempted to have a bank account opened with Swedbank in connection with a company that is registered in Malta was told, through his law firm, that:

“Unfortunately, Swedbank has decided not to open a bank account to the Company, on the basis that Malta has been categorised as a high risk country and they have higher expectations to the revenue.”

The client’s law firm inquired with Swedbank on the client’s behalf. In a prior e-mail, the client was told:

“Swedbank has asked for additional information and would like to know the yearly revenue and the expected amount that will be kept on the account. This is due to the reason that companies incorporated in Malta are in the high risk category and a reso- lution to open the account must be taken by a special committee.”

While it is evident that Malta has not been blacklisted, added measures have been set in place in order for the bank to set up an account for companies registered in Malta, by means of a special committee. It also confirms that the bank would not go through the process of calling the special committee for accounts that are not projected to have a certain level of revenue.

Swedbank has a strong presence in Sweden, Estonia, Latvia and Lithuania. It also has a presence in Copenhagen, Helsinki, Luxembourg, Marbella, New York, Oslo and Shanghai. The Malta Independent on Sunday reached out to Swedbank for a comment, asking when Malta was changed to a ‘high risk’ category, why there has been this change, why a special committee is needed and when the bank started to use a special committee to take decisions on such cases.

Swedbank wrote back to say they preferred not to comment on the matter, but did not deny the story.

A year after Minister Konrad Mizzi and the prime minister’s chief of staff, Keith Schembri, were exposed as having a secret company in Panama each, the prime minister’s wife, Mrs Michelle Muscat, is now being accused of owning the third Panamanian company acquired at the same time as those belonging to Mizzi and Schembri — Egrant Inc.

Journalist Daphne Caruana Galizia has also alleged that one of the daughters of the Azerbaijani president, Leyla Aliyeva, transferred US$1.017 million through an offshore company with an account at Pilatus Bank, Malta, to Egrant Inc.

Many have raised concern over the scandal’s effect on the financial services sector in Malta. In addition to the Panama affair, Malta’s tax imputation system has also come under fire for attracting foreign companies to set up shop on the island and take advantage of the 6/7 tax rebate, essentially taking away tax revenue from other countries where those same companies are actually operating.

The Labour Party (PL) has accused the Opposition of conjuring up the allegations in a ruthless bid for power while also causing irreparable harm to the financial services sector that employs thousands of Maltese and is one of the biggest drivers of revenue on the island.

The Opposition, however, has said that it is the actions of Minister Mizzi and Keith Schembri — in acquiring offshore structures while having the status of politically exposed persons — which have caused irreparable damage to the industry and placed Malta under the spotlight.

Last week, this newsroom reported on leaked e-mail correspondence between Commerzbank and one of its clients where the former informed the latter than in order to keep the bank account open, declarations made by local auditing firms would have to be checked with the Frankfurt unit of the same auditing firm.

The Accountancy Board, which is the regulator in Malta for warranted accountants, made contact with the bank and issued a statement saying that the decision does not pertain to Malta as a jurisdiction, but to a specific company structure.

Of interest to note is that the board did state that Commerzbank is indeed accepting declarations made by local auditing firms, but that it is “fully satisfied that the case in question is only related to a specific situation involving a particular type of company structure. It is not specifically related to the jurisdiction of Malta or Maltese auditors.”

Despite the issue at hand being a matter of grave concern to Malta and its economy, the board failed to delve into what kind of company structure or situation causes Commerzbank not to accept declarations made by local auditing firms.

Finance Minister Edward Scicluna, when asked by this newsroom for further details, said that it was the Accountancy Board which delved into the matter. He added that:

“It is in the regulator’s own interest to see if there are any problems. I imagine that work is ongoing, but that the information they were given was that this issue was about a particular situation and not Malta as a jurisdiction.

“What is happening in Malta is not doing us any good. We are playing with fire. If this is reflected in any decisions taken by whichever bank, well, I travel and I hear things. Even in a local paper, every article is filed and is noted internationally. If there are no answers to certain reports, then this causes damage. Everybody carries their own responsibility. I am not blaming anybody; however, what is going on is not doing our country any good.”