The Malta Independent 5 August 2021, Thursday

TMID Editorial: FATF - Why not work together?

Monday, 19 July 2021, 07:34 Last update: about 17 days ago

During an interview with The Malta Independent on Sunday, PN MP Mario de Marco said that the party had not received any real feedback from the government on the idea of setting up a national task force to tackle Malta’s greylisting.

This newsroom had, a few weeks ago, penned an editorial highlighting that the buck stops with the Prime Minister.

Malta’s reputation has been tarnished by the number of scandals that have taken place in the country over the years, due to politicians acquiring companies in secretive jurisdictions, by politicians having a lack of good judgement in who they spend their time with or are close to, by questionable deals signed by the government.

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The lack of action in dealing with these issues once scandals broke, is the most worrying part.

Now, Malta has paid the price. We are greylisted. Hopefully Malta’s top politicians will learn from this mistake and take a zero tolerance attitude when it comes to questionable behaviour by people in top posts.

But in order for Malta to get off the greylist, the country needs to work as one. The FATF needs to see that Malta is effectively implementing what it has signed into law and in regulations.

In order to make any required amendments to regulations, in order to ensure that everyone is onboard, wouldn’t it be better to ensure that all interested parties are working together, proposing ideas and debating the way forward?

If yes, then wouldn’t a national task force make sense?

Regardless of the approach the government opts to take, one thing is certain, the sooner the Malta is off the greylist, the less the impact this situation can have.

We must ensure that Malta’s economy does not take a hit, especially now when the government is going into extensive deficit due to the Covid-19 measures it rightly implemented to protect Maltese businesses and help families.

This is no time for partisan stances. But one thing is for certain, if there is no clear will to work together, then both sides will not fully understand each other and make proposals which the other will likely shoot down, thus wasting time. One example is the constitutional amendment that was not passed through Parliament regarding administrative penalties and regulators. The opposition had argued that independent courts and tribunals should be the only institutions that handed out high penalties and that these should not be done by authorities appointed by the government.

De Marco, during the interview, brought up a study published by the International Monetary Fund on the impact of greylisting. Generally speaking, he said, there seem to be three major consequences which greylisting brings about for a country.

The first is that banks tend to undergo a de-risking exercise, possibly increasing due diligence on companies that operate in a grey listed jurisdiction. The second is that existing investors tend to lose confidence and the third is a drop in foreign direct investment.

It has been reported that Malta’s deadline to implement the action plan agreed with the Financial Action Task Force for Malta to get off the greylist is January 2023. Many hope it will be sooner. But what is certain is that we should not create a situation where we have to be on it longer than we need to be.

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