Friday, October 2, 2020



With all this talk about cleaning up rampant money laundering in the Republic of Malta, given external pressure from the EU and the United States, the first place you want to start is close to home. The Bank of Valletta, whose years of major compliance failures were the subject of a scathing report adopted by the European Central Bank last year, must be the first problem Malta must solve, and fast.

The Bank has never effectively managed risk, and its anti-money laundering and countering the financing of terrorism programs were ineffective at best, and an abject failure, if the truth be told. Neither management, nor ownership, nor staff frankly deserves to be retained, if true reform is to be accomplished. Anyone who says otherwise is fooling not only themselves, but they are partly responsible for Malta's "Banana Republic"well-deserved reputation.  Start with the idiot who decided that foreign nationals who purchased IIM (CBI) passports should be listed as low-risk Maltese citizens on their account records. Having been a compliance officer myself, all I see here is trouble, and you need to fix everything, now.

First of all, The illegal nationalization of the bank, by a prior government who deprived the original shareholders of their property under false pretenses, but be revoked. The original NBM shareholders, whose equities have been recognized by the courts, but ignored by the present government, in Bad Faith, deserve to be made whole again. To do anything less is an insult to the Rule of Law. The present shareholders should be fairly compensated for their losses.

Second, the directors and management of what has become a money laundering magnet, have failed in their duties, and should be dismissed by the new owners. Frankly, some of them deserve prison sentences for money laundering, but we need reform now, not retribution. Replace them with individuals neither beholden to the government, nor the wealthy business owners.

Third, retain only those staff who have demonstrated that they are capable of discharging their duties without corruption, or blindly following orders that they know damn well are illegal.

Finally, create an effective compliance program, following ECB best practices, to turn the bank into a model of anti-corruption, and anti-money laundering. Eject the criminals who are customers, and close their accounts; Clean house in every way.


 If Malta can do that, reform will not only be possible on a national scale, it will occur. Who will second this proposal ?

Note to the European Central Bank: if Malta does not clean the BOV mess up, threaten to revoke its bank charter, and do it if necessary. 

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