Editorial | ‘Putting the bad guys in prison’

Sanctions expert Tom Keatinge tells Business Today that Malta’s approach to sanctions is a far cry from the negative perception harboured abroad. Indeed, he praises the manner by which Malta adopts international and EU sanctions and even argues it could teach other member states on certain best practices.

He also makes the point that Malta is unfairly judged abroad. This is a phenomenon probably fomented by international monitors and agencies who are easily influenced by the more vocal critical voices locally and who do not bother to get a full picture on the ground.

But while it is a fact of life that a small country like Malta has to constantly prove itself, Keatinge does point out Malta’s track record on enforcement is dismal.

The country may be good on a policy level and on the implementation phase but falls short when it comes to investigating, arresting and “putting the bad guys in prison”.

Keatinge’s observation is nothing new. Indeed, it can be said for all types of enforcement.

The problem is that a lax attitude towards enforcement only helps to reinforce the bad image of the islands abroad.

This reputational damage complicates matters for legitimate businesses – both foreign investors who want to transfer or open a new branch of their business in Malta and domestic investors who want to seek foreign markets.

Malta already passed through a lot when it was grey listed by the Financial Action Task Force (FATF). Irrespective of how political the grey listing may have been in the wake of the Daphne Caruana Galizia murder and the implications of corruption at the highest level of government, the FATF grey listing raised eyebrows in investor circles.

A concerted effort to get off the grey list as quickly as possible left the desired results. The police went into overdrive investigating and prosecuting several people over financial crimes. The courts saw a veritable unprecedented wave of money laundering, fraud and tax evasion cases.

But unfortunately, now that Malta has been off the list for almost two years, the problem of enforcement in this aspect appears to have returned. The number of police prosecutions on money laundering and other financial crimes has mellowed. This was a prospect former FATF chief Marcus Pleyer had warned against.

Indeed, it is not just a Malta phenomenon but given we are a small country prone to bullying by larger states, it is of no help to let down our guard.

The regulatory and investigative authorities should pursue all avenues to clamp down on financial crime. This is a battle that must remain a priority because it has implications on an economic level.

Malta’s economy has performed well above the Eurozone average but nothing should be taken for granted.

The police unit tasked with investigating and prosecuting such crimes, the FCID, should continue playing a central role in various criminal investigations so that it is not just the predicate offence that is prosecuted but also its offshoots. We need to start putting the bad guys behind bars.

Protecting the island’s reputation is important. It will help to make it easier for Maltese players to tap into foreign markets since fewer hurdles will be placed in their way; and it will make it easier for foreign investors seeking to expand their business overseas to consider Malta without hesitation.