Members of the Financial Action Task Force (FATF) have voted to grey list Malta in a vote taken during a plenary session on Wednesday.

The move, which has been widely expected, could have negative consequences on Malta’s financial services and banking sectors, as well as on its attractiveness to foreign investment.

The result will not be officially communicated today since the ballot was taken in secret, as is customary at the FATF. Malta did not have a vote.

Last week it emerged that the UK, the US and Germany wanted Malta to be grey listed – a term which means that the country will be placed under increased monitoring – despite the country having passed an equally arduous Moneyval assessment in March.

Senior government figures including Finance Minister Clyde Caruana and Foreign Affairs Minister Evarist Bartolo have spent the past few days lobbying to turn the table in Malta’s favour. Despite these efforts, however, Malta did not gather enough support to avoid being grey listed.

According to reports, the United States did not back Malta during Wednesday’s meeting. The vote must now be formally approved by the task force’s broader membership but this is considered to be only a rubberstamping process.

It is understood that the FATF also voted to grey list Romania. This means that the two countries will become the first two EU Member States to be placed on the grey list.

Once a country is grey listed, it is given an action plan which it must adhere to within a specific timeframe to be taken off.

The decision-making body of the FATF is the Plenary, which consists of 37 member countries and 2 member organisations. The FATF takes its decisions by consensus. Representatives from observer organisations and associate members also take part in discussions, representing a global network of 205 jurisdictions.

The plenary ends on Friday and the results will be officially announced then. Even then, there might not be a public announcement before at least a few weeks.

Iceland was placed on the grey list for a year in 2019 and said later that the economic effect had been “significant.”

The members represented at the FATF plenary are: Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Denmark, the European Commission, Finland, France, Germany, Greece, the Gulf Co-operation Council, Hong Kong, China, Iceland, India, Ireland, Israel, Italy, Japan, Republic of Korea, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Portugal, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States.

Finance Minister Clyde Caruana hinted last week that the motive behind the lack of support towards Malta could be “political.” He insisted that, should the process be a purely technical one, then Malta should pass, seeing that it had passed all Moneyval compliance requirements. He said, however, that should the process be vitiated by political motives, the FATF assessment is a “closed box.”

Caruana also insisted that Malta would do everything in its power to protect its interests. This, sources said, could include Malta using its veto powers at EU-level against countries who failed to back it at the FATF.