Financial institutions should not only look at whether people are politically exposed persons (PEP), but also at whether or not the person in question could influence political power, Chairman of a Committee of Experts on anti-money laundering measures Daniel Thelesklaf said.
The statement was made during a meeting of the EU Parliamentary Committee looking into the Panama Papers.
PN MEP David Casa asked: “In Malta, we have the only EU minister involved in the Panama Papers scandal. To identify a minister as a PEP is easy. We had another PEP involved, the Chief of Staff of the Prime Minister, who has a lot of political power. How can we have a system where these politically exposed persons are immediately exposed and prevent them from making such deals? We need to have a better system than we have today.”
OPM chief of staff Keith Schembri was mentioned in the Panama Papers for having opened companies both in Panama and the British Virgin islands. Along with Mr Schembri, Minister Konrad Mizzi had also opened a company in Panama, which resulted in him losing his health and energy portfolios, although he is still very visible when it comes to energy-related projects in his new role as No Portfolio Minister.
In response, Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) Mr Thelesklaf said that he is unable to speak of the specific case of which he has “no authority and little knowledge about”.
“We shouldn’t forget that if someone is not a PEP, this does not mean there is no risk. The instrument to define PEPs only says that banks and others need to apply enhanced due diligence with these persons. It doesn’t mean they can’t do anything with regard to others. If someone has a senior position in government, it’s exactly as you say. The actual question is, does he have access to funds, can he use his influence for important decisions that have an economic advantage. It’s not necessarily the title of the person, whether he is an ambassador or not or a minister or not, it’s rather a question of whether he influences political power”.
He went on to say that it is easier for a domestic financial institution to recognise such persons, and that it is slightly harder for international institutions, “but there are a lot of companies that can provide such information, commercial companies who sell it for money, that financial institutions can use. We recommend financial institutions to use that information. How can we help financial institutions to detect abuse? One good example and practice are income declaration systems, and many countries oblige their senior politicians to declare their assets and income making that information available, at least, to financial institutions. That is a very useful instrument”.