The return of Moneyval – not a Damocles sword

Media reports that a team from the Financial Action Task Force (FATF) will soon visit have made regulators optimistic about the progress achieved since the initial removal from the Grey List.

Down memory lane, in June 2021, the FATF announced that Malta was included in the list of jurisdictions which were greylisted. A lot of water passed under the bridge since that inglorious date. The FATF is the global anti-money laundering and counter-financing of terrorism (AML/CFT) standard setter, responsible also for evaluating countries’ adherence and implementation of these international standards.

Way back in 1990 the FATF issued the first set of international standards known as the FATF Recommendations, which kept being updated with the evolving criminal trends over the years. Although these international standards are not legally binding, unlike EU legislation, jurisdictions are expected to follow and implement them and are regularly evaluated to monitor their level of compliance with these standards. In our case, evaluations were carried out by the FATF itself.

The FATF team had expressed positive comments that significant effort has been manifested behind the scenes to clean the stables. It is worth noting that a revamped MFSA, now with larger cohort of qualified and highly-trained staff, is poised to maintain a higher level of prowess. There are certainly some weeds in the garden, but the invasive plants have been dug out and a new drive manifested in a renewed corporate stakeholders forum.

Beyond doubt, the government looks forward to a continued start in its flight against financial crime, money-laundering abuses and pledges to tighten transparency, meritocracy and good governance. As, if in a scene from Macbeth, there is a collective guilt feeling that we have sinned and allowed corruption to be dressed as virtuous when financial crime had serendipitously taken root and tarred our collective conscience.

As referred earlier, in the past, laissez-faire had penetrated the bureaucracy and corruption was camouflaged as virtuous, which reminds us of theories when vices are sugared as virtues – please refer to The Fable of the Bees written by Mandeville (1714). Again, a purge of the skeletons in our cupboard and an administrative reform has laid wide open the foundations to win back our reputation of a respected financial domicile. Combine such positive news with the feeling of a bright future for the islanders as their collective efforts has borne fruit.

After last year’s bumper tourist season, one might be tempted to look forward to balmy days of previous summers when the island enjoyed an ephemeral standard of living code dubbed L-Aqwa Zmien.

Imagine, how spring will grace our islands as following carnival celebrations, we pass into Lent. Soon, in a few months’ time, we can rejoice in the joys of summer. This shall usher in a cocktail of summer festas, tasty food and beer accompanying characteristic band marches in every village with noisy fireworks interwoven in the fabric of a friendly country. We work hard and deserve a good standard of living. Gone are the weekly medical bulletins sadly informing us of Covid cases and the rising number of mortalities.

The elderly and vulnerable once again can go out on countryside walks or take trips to Ta’ Qali, Delimara or Gozo on the fast ferry now boarding from Valletta. The new tourism minister is pledging to go for quality tourism; moving away from the policy of subsiding hordes of bucket and spade travellers on low-cost airlines. A renaissance is emerging, focusing on attracting international business conferences, upscale cruise tourists and avant-garde conferences.

The mantra of quality first has finally permeated in the vision of a new energetic tourism minister. Let us reflect how Spain, with its resplendent economy was buoyed with a record number (90 million) of visitors last year. Locally, we have moved away from the tense pressures of a Grey List era and international commerce has boomed. As a habit from staying at home during Covid days, workers nowadays enjoy working some days remotely. These habits are becoming critical facilities vital to improve productivity.

Remote working in government offices was already on the rise, but “working from home” is now, the new norm. It leads to changes in the traditional workplace impacting teamwork, productivity, collaboration, human interaction and communication. In conclusion, the good omen expected from the next Moneyval inspection does fortify us that as a jurisdiction, we acted contrite and vastly improved our good governance attributes.

From a set of 58 recommended actions, which were identified in 2021 by Moneyval, the patient is recovered and improved his/her effectiveness in implementing stronger AML/CFT laws. We have carried out all the necessary legal reforms to address these norms including nine out of 40 technical recommendations that were considered necessary to be better aligned with the FATF standards. Malta is now one of a very limited number of jurisdictions across the world, which is compliant or largely compliant, with all the 40 technical recommendations.