Malta’s financial regulators and authorities have found themselves under heavy scrutiny these past few years, due to the countless scandals that have plagued the Maltese islands.

And indeed, the criticism has been on point, given the lack of action seen to be taken by certain authorities over recent years when it comes to those who are considered to be in the top echelons on power. Indeed regulations in recent years have also been found to be lacking by international authorities, and changes were ordered.

However heavy international scrutiny had begun to take its toll, and Malta’s reputation falling to pieces was something that needed to be addressed.

Indeed the Financial Intelligence Analysis Unit began working to address a lot of issues that had been found with regards to Anti-Money Laundering legislation, which in this newsroom’s opinion is a great step forward.

Now the the Malta Financial Services Authority's is undergoing a two-year strategy, which takes it up to the year 2021.  BaFin's own President Felix Hufeld had told The Malta Independent on Monday that the strategy is so impressive that it could - if implemented fully - serve as a benchmark for the Germany regulator BaFin.

The key priorities of the strategy, MFSA CEO Joseph Cuschieri had said, “are - governance, culture and conduct; financial crime compliance; financial sustainability; innovation; cyber security and resilience; organisation and operational capacity (increase resources); conduct supervision.

Such a statement by the head of the German regulator is surely a sign that things are moving in the right direction, at least in terms of regulation and strategy.

However, the crux of the matter remains that Malta’s institutions have taken a beating. Indeed while the FIAU for example had conducted many investigations, it is the police who are being criticised for not following up, as was the case with some recent scandals.

Until the authorities put actions where their mouth is in terms of allowing the public to see justice taking its course, to see investigations actually taking place rather than give the impression that those with most power can do as they please, then all these changes being made by the authorities will simply remain cosmetic.

That being said, praise by the head of a foreign regulator like Bafin is not something we are used to seeing nowadays. Indeed the MFSA striving to improve regulations and internal operations after foreign authority scrutiny and not opting to drag their feet is also to be commended. This was also shown during discussions which took place during the recent EY conference. 

This year’s budget speech also included a particularly interesting proposal, the introduction of a limitation on cash transactions to €10,000 for high-value purchases such as properties, vehicles, art, precious stones and yachts. This is one issue which can help fight against tax evasion. Obviously how this will be monitored is a challenge which the authorities would need to sort out.

Indeed all the changes being made in terms of regulation to combat financial crime need to be paired up together with effective and strong enforcement. The problem today is that Malta’s enforcement agencies are seen to be lenient, or at times seen to completely ignore, those in power. In order for Malta to be seen as a serious jurisdiction, this needs to change.