European Commissioner for Justice Vera Jourová has rebuked Maltese MEP and former Prime Minister Alfred Sant twice in as many months as he continues to claim that Malta’s infamous Pilatus Bank was treated unfairly and disproportionally compared to the Netherland’s ING Bank and Latvia’s ABLV Bank.
Last month, Commissioner Jourová replied to Sant after he asked the European Commission to “explain why the Maltese case has been treated disproportionately in comparison to the Latvian case.”
In a European parliamentary question, Sant had observed how “the US Treasury said that the bank was involved in the theft of $1 billion in assets from fraudulent Moldovan banks. As for Malta’s Pilatus Bank, Ali Sadr Hashemi Nejad, the chairman, funnelled $115 million through US banks.”
He added that Latvia’s ABLV bank held around $4.6 billion in assets and handled tens of billions of US dollars in offshore transactions, but failed to mention assets and transactions handled by Pilatus.
According to Sant, the Commission is handling the Latvian situation with kid gloves compared to the Pilatus predicament.
He said: “The Commission is monitoring the situation in Latvia regarding the liquidation of its ABLV Bank and several letters have been sent to the Latvian anti-money laundering authorities. It has also asked the European Banking Authority (EBA) to investigate whether the Latvian anti-money laundering supervisor has breached EC law.”
He added, however: “For Malta, on the other hand, the Commission requested preliminary enquiries that lasted for two years, in addition to on-site investigations. Moreover, it requested that the Financial Intelligence Analysis Unit (FIAU) meet and produce additional information.
“It has also asked the Maltese authorities to take a number of measures that questioned its methodology, strategy and ability to react, in addition to its inspection processes.”
He also cried foul over the fact that “Commissioner Vera Jourová has referred to the fight against money laundering in the context of ‘Malta and other countries’ and has repeatedly referred to Malta’s systematic weaknesses.”
The European Commission, however, dismissed Sant’s claims. In her reply, Commissioner Jourová said: “The Commission pursues a rigorous and coherent enforcement policy that treats member states equally. It will take action should another breach of Union law be concluded by the EBA in relation to actions of any authority in a member state.”
She stated that the fight against money-laundering and terrorist financing was a priority for the Commission, which followed events in member states, including Latvia, very closely.
The Commissioner explained that, according to Article 17 of Regulation (EU) 1093/2010 establishing the European Banking Authority (EBA), the Commission had the power to request an EBA investigation into potential breaches of Union law by an authority of a member state.
She said: “In October 2017, the Commission requested that the EBA investigate whether any breach of Union law occurred in Malta in relation to Pilatus Bank. In November 2018, further to the EBA concluding on a breach of Union law in Malta, the Commission adopted an opinion calling on the Maltese Financial Intelligence Analysis Unit (FIAU) to take concrete steps to comply with its obligations under the 4th Anti-Money Laundering Directive.
“Since then, the Maltese FIAU has developed a dedicated Action Plan to address deficiencies and has undertaken a commitment to submit a formal report to the Commission. The Commission has been receiving regular status updates on the ongoing effort of the Maltese FIAU to enhance its effectiveness and compliance with Union anti-money laundering rules.”
Not satisfied with this reply, Sant pressed the issue further with a follow-up question, again claiming unfair treatment of Pilatus compared to the treatment of ING Bank. He said that the Commission had not taken any specific action regarding the Netherlands’ financial authorities and merely acknowledged the fine imposed on ING Bank on account of its illicit activities.
He added: “For years, the Netherlands’ largest bank, ING, has been guilty of laundering money through its circuits. ING accounts were used for crime, most notably for bribes in Uzbekistan. Since 2008, ING has repeatedly received warnings, yet no measures have been taken.
“As for Malta’s Pilatus Bank, Ali Sadr Hashemi Nejad, the chairman, funnelled 115 million US dollars through US banks and the bank has had its licence withdrawn.
Can the Commission explain why the Maltese case has been treated disproportionately in comparison to the Dutch case?”
Jourová replied: “In relation to Pilatus Bank, the Commission has exercised its powers by requesting the EBA to carry out an investigation on whether the competent authority in Malta, namely the Financial Intelligence Analysis Unit (FIAU), has breached Union law by failing to adequately and effectively supervise Pilatus Bank under the Anti-Money Laundering Directive.
“The powers of the Commission and the EBA in this instance related to breaches committed by competent authorities, and not to breaches of anti-money laundering legislation by Pilatus Bank itself.
“As regards ING, the competent authorities of the Netherlands took several supervisory measures towards the bank. This case and all other recent cases involving European banks will be examined by the Commission in the context of the thorough assessment on further strengthening the EU’s anti-money laundering framework, including an assessment of recent cases of money laundering involving European banks, which it will carry out in line with the invitation of the Economic and Financial Affairs Council.”