Malta off FATF greylist: FIAU director says constant vigilance is crucial
Industry leaders agree Malta needs to learn from past mistakes and make sure it maintains standards it had to achieve to get off the FATF's greylist
by Paul Cocks
There is common consensus among financial institutions and financial services practitioners that getting off the FATF’s greylist was crucial for Malta. However most also seem to agree on the need to remain vigilant, maintain the standards achieved and not repeat the mistakes of the past, BusinessToday has learned.
Kenneth Farrugia, director of the Finanacial Intelligence Analysis Unit was blunt in his assessment following the FATF’s decision.
“We are not perfect,” he said. “It is imperative we don’t allow ourselves to slip back to where we were at in 2018.”
A spokespeson for HSBC Malta agreed. “It remains imperative that Malta continues embedding an enduring and deep-rooted financial crime risk culture within our economy and society,” they said.
A spokesperson for APS Bank said that more progress needs to be made in terms of consolidating Malta’s track record in tackling financial crime – especially in terms of effectiveness rather than on-paper compliance.
Bank of Valletta chairman Gordon Cordina said that getting off the greylist in a year was in itself a point in Malta’s favour and would go a long way towards reassuring potential investors who might have hesitated to invest in Malta during the past year.
Financial advisor Michael Grech also welcomed the FATF’s decision but insisted small business should be protected from the financial and bureaucratic burdens introduced to bring Malta up to par.
Below are their reactions in full:
Kenneth Farrugia, FIAU director
We did a good job to introduce and implement the changes and processes necessary to get the country off the FATF greylist within one year.
Now that we are off the greylist, there is general consensus among politicians, authorities and institutions that we should do all that is necessary to ensure we maintain the standards we have now achieved.
We are not perfect. We need to remain vigilant and continue maintaining and perfecting the system. It is imperative we don’t allow ourselves to slip back to where we were at in 2018.
Gordon Cordina, BoV chairman
To be honest, up to this point we had not really seen the greylisting impact employment figures, value added or the financial sector. Bt everyone was aware that there was serious risk going forward.
If Malta remained blacklisted, foreign investors and businesses would have started to re-evalate Malta.
Now that risk has been averted.
The fact that Malta got off the greylist in such a short time is in itself a vote of confidence that will go a long way towards reassuring prospective investors.
Michael Grech, financial advisor
Getting off the FATF’s greylist means lot. The entire financial services sector had been awaiting this moment for a year and it is to be hoped that the mistakes we did in the past will now not be repeated.
However this period and the reforms and processes introduced have highlighted a gross shortcoming in the reasoning of global and European institutions, who insist on applying a one-size-fits-all approach for all business. So a business that employs five, 10 or 20 people has to follow the bureaucratic processes as a business which employs 1,000 staff.
We want to government to tackle this imbalance. While acknowledging that all businesses must adhere to the same regulations and standards, we cannot ignore the fact that most small businesses simply cannot afford the costs as large businesses.
We have seen numerous examples of small businesses folding during the time we were greylisted as they could not keep up with the new additional costs that the standards of compliance necessitated.
The European Union itself seems to have forgotten the fact that it was built on SMEs, or maybe it is ignoring the fact that what makes an SME in a country the size of Malta is not the same in larger countries.
It is imperative that all businesses, large or small, are up to established standards, but we should ensure we are not killing businesses in the process of setting those standards and procedures.
Everyone has to shoulder some responsibility for what led to Malta’s greylisting: business, yes, but also the authorities and regulators.
HSBC Bank Malta spokesperson
The decision to remove Malta from the grey list is testimony to the significant progress our country has made in this area. It remains imperative that Malta continues embedding an enduring and deep-rooted financial crime risk culture within our economy and society.
This is vital for the country’s reputation, sustainability of the financial services sector, and trustworthiness as a competitive jurisdiction.
HSBC Bank Malta continues to operate its business as usual and is determined to continue providing an excellent service to its personal and business customers.
The Bank has zero appetite for financial crime risk and operates to the highest global standards in financial crime compliance while striving to protect the community it serves.
APS Bank spokesperson
The swift exit of Malta from greylisting (similar to what Iceland, another island state, achieved in 2019) brings our jurisdiction’s international reputation back to an acceptable level.
Although more progress needs to be made in terms of consolidating our track record in tackling financial crime – especially in terms of effectiveness rather than on-paper compliance – the exit from greylisting gives the country the opportunity to consolidate its attractiveness as a financial services ecosystem which is able to attract investors and businesses who can rely on a robust governance platform from which to operate.
This will also strengthen Malta’s perception as a country where ease-of-doing-business ranks high on government and the regulators’ agenda.
