Editorial | Fighting financial crime must be a top priority

Malta faces the crucial Moneyval test next month and failing it will cause problems on the international stage. But this is not just about passing a test but about the need to have an ongoing commitment to fight financial crime

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Fighting financial crime must be a top priority for Malta as the country tries to escape from the shadows of the bad reputation it developed over the past few years.

Part of the problem was Malta’s rapid economic expansion that was not matched by an equally rapid increase in quality resources for law enforcement and regulatory agencies.

In this way, institutions like the Malta Financial Services Authority, the Financial Intelligence Analysis Unit, the police economic crimes unit and other institutions could not keep up with the influx of high-risk business in financial services and gaming.

To this end, the millions budgeted for the MFSA and the FIAU over the last couple of years to boost human resources and introduce modern regulatory and compliance systems were more than welcome.

These two institutions, today, are better placed than they were two years ago, to act as pro-active watchdogs on a burgeoning sector.

The police, under the direction of the new police commissioner, have also redirected efforts and investment to make the fight against financial crime a priority.

All these efforts must be strengthened, especially within a context where financial crime is often linked to organised criminal groups and corruption.

Going after the big fish requires knowledge, expertise, resources and cross-border cooperation.

But part of the problem that caused Malta’s reputation to nose-dive, was the impression of impunity imparted by those in power.

When journalist Daphne Caruana Galizia revealed that Konrad Mizzi and Keith Schembri had opened companies in Panama shortly after Labour came into power, no proper investigation was carried out despite a preliminary report by the FIAU indicating the possibility of money laundering.

Testimony given in the Caruana Galizia public inquiry by the former police commissioner shows how investigations progressed at a slow pace, suggesting there was no real appetite to go after the culprits.

The same holds water for an investigation into Dubai company 17 Black, which was later revealed to belong to Yorgen Fenech. Requests for cooperation sent to the UAE, appear to have been incomplete, making it harder for the Arab Gulf state to share information.

This go-slow attitude has nothing to do with lack of resources and expertise but has much to do with the lack of will to go after people in power when they do wrong.

It is an indication of subservience to politicians who were unwilling to rock the boat, stop corruption and bring to justice those who robbed taxpayer money.

Malta has paid a high price for this attitude and this is why it has now become more crucial than ever to see charges being filed, people close to power being prosecuted and have justice run its course.

Strengthening laws, investing in law enforcement and regulatory agencies, toughening penalties and creating new entities are all important changes. But on their own they will not be enough.

Malta faces the crucial Moneyval test next month and failing it will cause problems on the international stage. But this is not just about passing a test but about the need to have an ongoing commitment to fight financial crime.

Government is working hard to avoid the Moneyval predicament and institutional and legal changes undertaken over the past months are positive developments.

But more has to be done to chase high-level corruption and money laundering with the scope to bring perpetrators to justice.

It is only then that Malta’s reputation of a country where impunity reigns can start to change.

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