Pilatus Bank has been officially closed down on Monday, with the European Central Bank revoking its licence two years after it was first implicated in alleged money laundering breaches.
In a statement, the Malta Financial Services Authority on Monday said that further to the authority’s proposal to the European Central Bank to withdraw the authorisation of Pilatus Bank as a credit institution, the ECB's Governing Council had decided to withdraw the institution's authorisation with immediate effect.
Last March, Pilatus chairman Ali Sadr Hasheminajad was arrested in the United States for alleged sanctions busting. After the arrest, the MFSA froze the assets of the bank and recommended the withdrawal of its licence.
The European Banking Authority subsequently found "general and systematic shortcomings" in the application of anti-money laundering directives.
The Competent Person remains in control of Pilatus Bank in terms of the Banking Act as communicated last April. All of the regulatory measures taken in relation to the bank remain in full force and applicable until further notice by the authority.
Further information may be obtained by accessing the Authority’s webpage www.mfsa.com.mt. Any communication in relation to Pilatus Bank should be addressed to the bank on 356 2779 9999 or the Authority on contact number Freephone 80074924.
The bank, which had its offices in Ta' Xbiex, has been at the centre of political controversy ever since a series of leaked financial intelligence reports alleged money laundering and serious compliance shortcomings.
Bank license should have been withdrawn months ago - PN
In a statement, the Nationalist Party said the decision to close down the bank should have been taken months ago, to protect the country’s reputation.
PN MPs Mario de Marco and Kristy Debono, who are the spokespersons for finance and financial services respectively, welcomed the EBA move, saying that the Opposition had been insisting for months that the bank should be shut down.
They said that, while the PM washed his hands of the situation, the PN was insisting that the bank’s license should be withdrawn to avoid harm to the financial services sector and its employees.
This was especially important after the bank’s chairman was arrested and charged in the USA in March, they said, adding that Ali Sadr could be jailed for up to 125 years. The PN pointed out that both the PM and his chief of staff, Keith Schembri, had attended Ali Sadr’s wedding in Italy.
The Opposition said the Financial Intelligence Analysis unit and the Malta Financial Services Authority had come under investigation because of Pilatus Bank’s licensing. This was also a big blog to Malta’s reputation. These two authorities, who fall under the political responsibility of Finance Minister Edward Scicluna, had failed to carry out their duties properly.
The PN said it would keep working so that the institutions, including the Office of the Attorney General, would not remain hijacked by the government and start safeguarding the country’s reputation.