Business leaders react to Moneyval draft report
While the government has received a positive draft of the Moneyval report, Prime Minister Robert Abela said that there is still work to be done over the next couple of months until the final report is issued. Abela was being interviewed by journalists on Sunday, where he was asked about the Moneyval report. The Malta Business Weekly spoke to David Xuereb, Daniel Borg and William Portelli for their reactions
In September 2019, Moneyval, the European branch of the Financial Action Task Force, or FATF, ruled that Malta remains highly exposed to illicit finance but lacks the resources and infrastructure required to prosecute and seize assets from money launderers and the criminals they serve. Malta had until October to implement Moneyval’s 58 recommendations for bolstering its campaign against financial crime to avoid inclusion on the group’s “grey list” of high-risk jurisdictions. Being placed on the grey list would be a death knell for Malta’s financial services industry especially. The government submitted its final progress report to the Moneyval experts. Abela stated that the country received a draft report but said “that now the country will enter the crucial stage – May and June – until the final FATF report is issued. The vital message there is that several changes in the regulatory regime on financial services were made. Mainly on resisting financial crime and on fighting against the financing of terrorism, where we show that all that was said about our country even before 2012, we have worked on and made all the needed changes.” He added that the government issued 48 pieces of legislation and legal amendments, and 2-3 months of important work remain.
William Portelli. President, Malta Union of Bank Employees
“Whilst avoiding ‘grey-listing’ is good news for Malta, the state and jurisdiction must make sure that lessons have been learned so much so that such circumstances are not to be allowed to happen again. For those behind Malta joining the European Union in becoming a fully-fledged member state, it also meant that we were ready to maintain high levels of governance, raising the bar to the highest levels in the process for all institutions to follow.
Thus, Malta should not stop here and be content with a simple pass mark but rather continue to rebuild Malta’s reputation by following up on all the 58 recommendations of the EU Council’s Moneyval report leaving no room for complacency. Lessons learnt, we have qualified people who can delve deeply into financial intelligence, money laundering and confiscation to back up the ‘policing’ role of the FIAU being so crucial to effective vigilance not just for a better future, but making sure we can now not just maintain it but improve on it.
It has always been a case of how the state behaves and performs, taking into context the governance by which it supports the institutions who are expected to properly conduct business by showing integrity, accountability and responsibility at all levels. Malta cannot accept anything short of the highest of standards as it is the only way our nation can continue to recover its previous long-time good reputation that directly supports all those who work in the finance industry. Instead of dragging its feet, the state should now show that it is capable of taking a zero-tolerance approach in support of proactivity in deterrence, the need to standardise mandatory practices and invest in qualified personnel to consolidate what has already been achieved in support of consistency and credibility.
Malta’s strong reputation of being traditionally a stable and reliable finance hub where the banking and finance industry prospers strives to not only recover but to renew the platform effectively. Malta as a jurisdiction needs to put its act in order with the state making sure that the relevant institutions are empowered, enforce where and when it is obliged to do so and show discipline in governance. To this effect, Malta has to avoid self-inflicted reputational damage that poses potential unwarranted risks to the country’s future wellbeing, which should supersede any kind of politics.
What we do and not do defines us, and I am convinced that Malta can do so much better since the situation should have never arrived at such a state in the first place”
Daniel Borg, CEO, Gozo Business Chamber
“The financial services sector is an important sector for our economy. Having certainty in business is of utmost importance, as the implications emanating from the potential outcome of such a crucial test as the Moneyval, are significant, considering the painstaking efforts done over the years to build this sector. Trust is based on transparency and on the fact that the legislative and enforcement measures are robust enough to investigate and stop any illegal activity in its tracks.
This, however, should not imply any slack in the country’s efforts to remain vigilant, and the financial sector and its regulatory framework should continue to evolve accordingly. Nonetheless. this should also be coupled with the efforts targeted towards strengthening our regulatory authorities, our service providers, and in trying to find the right balance between the need for regulatory intervention and requirements and the size of the businesses on which these regulations are being imposed.
Good governance is an essential element in all institutions, and the efforts done in the financial sector should highlight that we should strive for this to be the benchmark at all levels of society. Given Malta’s small size and the interrelatedness of economic sectors, it should bring to light the fact that any action undertaken has a bearing on all sectors and society.”
David Xuereb. Former President, Malta Chamber of Commerce
“Naturally, we are pleased to hear this initial news, as everyone has pulled together to ensure we get through this well, but on the other hand, this is by no means the end of the road. We must ensure we leave no stone unturned; passing a test is simply not enough. We need to ensure the long term. We must ensure that Malta is a jurisdiction that is confidently worthy of anyone considering doing business with. Equally, we cannot risk going to the other extreme and overdriving bureaucracy. Doing so may quell innovation and stifle the business entrepreneurship, our economy desperately needs. We remain cognizant that we are still in the thick of a significant pandemic, and we must continue to encourage the very best energies from our business leaders to remerge with the strongest prospects in place.”