MALTA's PRIME MINISTER ROBERT ABELA, AND HIS CABINET, IGNORED BANK OF AMERICA'S OFFER OF ASSISTANCE IN UPGRADING AML/CFT WHEN FATF SANCTIONS THREATENED

 

Robert, the Almost King  by COSIMO

Could the FATF Greylisting of Malta have been prevented by the Labour government ? That is the question many in the country's financial services industry have been asking, and new information, that has come from a source inside government, indicates that there may have been a way to avoid it.

We are advised that Bank of America, by and through its Chairman, Brian T. Moynihan, made an offer, directly to PM Robert Abela, at the end of 2020/beginning of 2021, to help Malta improve its Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) policies and procedures, in order to bring them up to acceptable international practices.

At the time, Malta had been previously adequate given advance warning, by the FATF, that, should the country not raise its AML/CFT levels, it would be placed upon the Greylist. Specifically, Malta was to ramp up its compliance and regulatory capacity, and improve the legal framework and function of the financial & banking sector; there was also a lack of enforcement of anti-money laundering laws.

The BOA offer was made directly through the Office of the Prime Minister, through its Chief of Staff, and direct line telephone numbers were offered to initiate contact. The offer was also conveyed to then-Deputy Prime Minister Chris Fearne, and to the Ministry of Finance as well. Although the offer was made repeatedly, and followed up by BOA staff, no reply was ever received by the bank, and no contact, telephonic or otherwise, was ever made by government officials.

You know the rest of the story; Malta was subsequently and very publicly Greylisted by the Financial Action Task Force, with lasting reputational damage throughout the European Union, as it was the first EU Member to suffer such a designation. The global financial world outside of Europe also governed itself accordingly, and there has been lasting reputational damage to the country's economy.

While there is no guarantee that government cooperation with BOA would have delayed or halted the FATF Greylisting, the failure of Robert Abela to engage is :

(A) Symptomatic of his administration's isolationist policies.                                                                 

(B) Irresponsible, given that over 100 financial firms have left Malta since Greylisting, along with the jobs those companies represented, and tax income. The exodus of financial services-licensed firms has been widely reported in international media.

(C) A Cause for Concern: why would Abela not want assistance from the world's biggest bank, given Malta's endemic issues with capacity, and its reputation for corruption? A possible answer: BOA assistance would most likely have uncovered rampant money laundering and corruption, and identified senior members of the present, and former government, including the recipients of the bank's offer.

Maltese businessmen, who have been busy blaming the United States for the Greylisting, need to look closer to home when assigning the real blame for this debacle, which should have never been allowed to happen in a nation whose primary industry is financial services. Think about it when you cast your vote this week.  

Robert, Making it Clear  by COSIMO

_________________________________________________