The press in the Republic of Malta has reported that it is anxiously awaiting the publication of a significant report on one of the country's other major official corruption cases, involving the power plant contract awarded to ELECTROGAS. What is unique about this report is that it is believed to be exposing the naked truth about the abuse of corporations used in secret Caribbean tax havens to secrete bribes and kickbacks paid to senior government officials by businessmen who made millions from illicit arrangements that returned obscene profits at the expense of the Maltese people.
Compliance officers at financial institutions in Europe would do well to regard any and all large transactions to, from, or simply transiting, Malta as high-risk, and institute enhanced due diligence upon them, meaning proving Source of Funds and Source of Wealth, as AML and CFT there is often trumped by greed and avarice by all involved. Whether it is Iranians holding St. Kitts CBI passports, and operating a dirty bank, or Venezuelans diverting government funds into local entities to launder, or cryptocurrency being transmitted as a part of terrorist financing into the Middle East, compliance officers should seriously consider the risk level when conducting any transactions even involving the maltese financial structure in a minor way.
While there have been, and will continue to be, a number of new prosecutions of government officials, and individuals in the private sector that facilitate systemic corrupt practices, the dysfunctional court system, and the power of a corrupt party in power, will most likely guarantee that none of the guilty ever spend a night in prison. Therefore, frontline compliance officers will continue to encounter Maltese transactions masked money laundering, fraud, and a whole shopping list of financial crime. If you cannot avoid it entirely, then consider whether the risks justify the rewards.
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