On 7 June, coincidentally one of Malta's five national holidays, a letter was sent by the European Banking Association about institutional investigations into the Pilatus Bank.

The EBA letter said that both the Financial Intelligence Analysis Unit and the Malta Financial Services Authority were under investigation for their action or lack thereof with regards to allegations made against the Pilatus Bank.

Questioned about this letter by former Opposition leader Simon Busuttil, Parliamentary Secretary Silvio Schembri said the letter was only 'routine'.

It was anything but routine.

The European Banking Association is the ultimate regulator with regards to banking and financial services. Last October, it was asked by the European Commission to investigate claims that the MFSA and the FIAU had failed to carry out their duties when they licensed and allowed the Pilatus Bank to operate.

The investigation with regards to the MFSA is still ongoing. Last week the EBA published its findings on the FIAU (See pg 6). It reports 'general and systematic shortcomings' in the FIAU's application of anti-money laundering directives.

To recap: Pilatus Bank was awarded a licence just a few months after Labour came to power in 2013. At that time, the chairman and sole owner of the bank was being investigated in a foreign jurisdiction on serious charges but this change was either not picked up by the local authorities or else conveniently ignored.

The bank's clients were mostly made up of politically exposed persons, including persons close to the ruling party in Malta or else people who are close to the Azerbaijan ruling elite.

Initial investigations into the bank's activities found serious shortcomings and also possibly criminal actions. A full-blown police investigation was recommended.

But then:

-         Police Commissioner Michael Cassar resigned in April 2016, a few days after the FIASU report landed on his desk;

-         A few weeks later, the then head of FIAU, Manfred Galdes, resigned as well.

-         Jonathan Ferris, who was said to have worked on some of the allegations regarding Pilatus Bank, was suddenly fired within days of the Labour Party's second electoral victory in 2017 and his efforts to be recognized as a whistleblower has so far not been accepted.

-         The initial reports on Pilatus were not followed up by the police.

-         Action against the bank was only initiated when its chairman and owner was arrested and charged in the US for serious financial crimes that included money laundering.

-         Besides, the EBA has found that the FIAU was too quick to close its files on Pilatus and failed to impose any sanctions on the bank despite the serious allegations that were made.

The main conclusion one gets is that at every step of this sorry tale the Maltese authorities seemed more interested in protecting the bank than upholding the law.

The FIAU response to the EBA document has been described as 'pathetic' and it is.

The Labour Party falsely claimed that the faults identified by the EBA had taken place when the Nationalist Party was in government, which is rather impossible seeing the bank had not been licensed then.

The Minister of Finance, under whose remit fall both MFSA and FIAU, who licensed the bank and is thus responsible for this failure to ensure that the authorities under his political responsibility carried out their duties, stated that he does not interfere in the authorities within his remit.

He, in turn, claimed that the regulation by MFSA and FIAU was carried out by people taken on by the previous government and kept in place by this one. He also claimed that his Opposition counterpart, ran out from Parliament which was discussing anti-money laundering laws to go and defend his private clients who were accused of ... you can't invent these things, money laundering.

Whoever is to blame is only a small part of what the country needs to establish. Far more important is to look ahead and take serious and convincing steps that such irregularities are nipped in the bud.