Deputy Prime Minister Chris Fearne has said it would be “inappropriate” for the executive to intervene with the operations of the FIAU when asked by The Malta Independent whether it was finally time for people to shoulder political responsibility following the damning report by the European Banking Authority into the institution.
“I understand that the FIAU is an autonomous institution and has its own board. The FIAU has already given its reaction and said that it does not agree with the methodology used by the EBA,” he said.
Reminded that this was, in fact, an independent EU institution which published these findings and where not recommendations simply up for debate, Fearne said that “it would be wrong for the executive to intervene its operations.”
“I understand that the board has to react to this report so we will wait and see,” he continued.
Followings its investigation which begun on 23 May 2018, The EBA found “general and systematic shortcomings" in the FIAU’s application of anti-money laundering directives with regard to the infamous Pilatus Bank, which according to leaked FIAU reports, was used to launder the proceeds from illegal kickbacks to the Maltese Prime Minister's Chief of Staff, Keith Schembri from the sale of Maltese passports.
The report also says that the FIAU had breached anti-money laundering directives.
PBS, the state broadcaster, has chosen to ignore reporting the actual report itself, selecting to carry solely the FIAU’s reply.
Pilatus bank was authorized by the Malta Financial Services Authority in 2014.
Both the MFSA and the FIAU carried out on-site inspections, with the latter initially saying that there were serious breaches of AML/CFT requirements. After a follow-up visit, the FIAU had said that the issues raised previously have now been closed.
The MFSA froze the assets of Pilatus Bank after its owner Ali Sadr Hashemi Nejad was indicted in the United States in relation to allegations to a number of financial crimes. He has since been released on bail in the USA, on serious conditions.
In its findings, the EBA said that the FIAU does not have sufficient records of the specific files and documents examined during the first on-site visit, to make it possible to identify which customer files were examined and which due diligence documentation was available or not available at the time, contributing to the FIAU’s inability to defend itself against the institution’s challenges.
In her covering letter to MEPs, EBA chairperson Andrea Enria said the FIAU is required to inform the EBA within 10 working days the steps the FIAU has taken or intends to take with regards to the EBA’s recommendations, which include fulfilling obligations under the 4th Anti-money laundering Directive and to ensure that national law is in line with EU law.