The Malta Independent 17 September 2019, Tuesday

Pilatus Bank UK branch closed, UK regulator tells PN MEP

Kevin Schembri Orland Tuesday, 24 April 2018, 15:09 Last update: about 2 years ago

Pilatus Bank’s UK branch has been closed down according to the UK’s Prudential Regulation Authority, as said in a letter communicated to PN MEP David Casa.

The Authority told Casa that Pilatus Bank informed them that the branch is closed and that the branch passporting notice is in the process of being withdrawn.

The Prudential Regulation Authority (PRA) at the Bank of England is responsible for prudential regulation and supervision of 1,500 banks, building societies, credit unions, insurers and major investment firms.

The controversial Pilatus Bank became a household name in Malta after slain journalist Daphne Caruana Galizia had introduced it to the local political sphere by reporting, among other things, its role in facilitating €1 million payment to the elusive Panama company Egrant, which she maintained belongs to the Prime Minister’s wife, Michelle Muscat. All involved vehemently deny wrongdoing and a magisterial inquiry into the allegation has been ongoing since 20 April 2017.

Pilatus Bank former chairman Seyed Ali Sadr Hasheminejad was arrested in the USA back in March 2018. He has since been forcibly removed as chairman of the bank by the Malta Financial Services Authority (MFSA), and sits behind bars facing a possible 125 years imprisonment over circumventing US sanctions on Iran, money laundering and fraud. He was forcibly removed as chairman after his arrest became public and pressure from the public mounted.

It was recently also reported that Pilatus Bank was used to “move millions around Europe” by a network of over 50 companies and trusts “secretly owned by Azerbaijan’s ruling elite” according to a consortium of news organisations from around the world forming ‘The Daphne Project’. Sources who spoke to the project have “confirmed” Azeribaijani ruler Ilham Aliyev’s children are clients at Pilatus Bank Pilatus Bank had threatened local media houses with SLAPP lawsuits in the past.

Casa had written to the CEO of the Prudential Regulation Authority about the bank, and in response, was told that the authority was keeping in close contact with the Financial Conduct Authority (FCA) over allegations related to the bank.

The PRA had informed Casa that Pilatus Bank had established a registered branch in the UK, passporting in as an authorised EEA firm. They also said that the bank has a registered freedom of services passport in the UK.

The PRA told Casa that a firm from an EEA state can passport into the UK through opening a branch, or on a services basis (to provide services from the home country), and that it will be regulated by the home state regulator, which is the MFSA in Malta.

The PRA has said that it will be actively engaged with the FCA and the Maltese regulator in relation to the recently issued MFSA directives requiring the bank to seek approval before affecting movement of bank assets.

Casa had also written to the National Crime agency - UK Financial Intelligence Unit (UKFIU), where he spoke of the allegations made about the bank, the bank’s Azeri clients, and “evidence of systemic money laundering by an entity operating within the UK.”

In response he was told that the agency will consider criminal allegations of bribery and corruption which potentially impact on the integrity of the UK as a financial sector. It said it will review the material provided.

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