In September, the Basel AML Index 2021 ranked Malta as the worst country in the EU for money-laundering risk. This does not augur well for a country whose one of the main economic pillars is the financial services sector. “Applying effective AML policies is important but the sudden over-zealousness we are witnessing, is excessive and damaging and is undermining 30 years of hard work and the huge investment it took to place Malta on the map,” says DANIEL BILOCCA, Corporate, Risk and Compliance director at NOUV, in an interview with The Malta Business Weekly

What in your opinion should be the country’s main priorities for an effective short-term action plan?

We need to touch base once again with what were the main factors which contributed to and made possible the successful setting up of this financial services sector in the first place. Malta managed to make it against all odds. We accurately drafted and enacted serious and detailed legislation; widened higher educational opportunities intended to prepare a new generation of practitioners, we set up credible regulatory bodies working alongside respected institutions and applied proper high-standard marketing of Malta until we achieved a sound international reputation.

This contrasts with a jurisdiction which from the heights of success has, in just a few years, become grey-listed and ranked as the worst country in the EU for money-laundering risk. The legislation is still in place and practitioners still provide high levels of service but the institutions that matter have been weakened by instances of selective inaction.

While the main effort can only come from government, the response to this national issue also has to be national. Government needs to engage, as openly and as comprehensively as possible, all relevant sectors and professionals. The short-term plan needs to identify the way out of this grey-listing classification and a longer-term plan needs to ensure we regain and maintain the impeccable reputation this country enjoyed up till not long ago.

We need to avoid at all costs a management-by-crisis approach. Dishing out hefty penalties overnight won’t work. Prosecuting tax dodgers is a duty but this will not restore this country’s tarnished reputation. Our institutions need to show that they work, that they are effective and that they can be strong with the strong, and not only with the weak. Being strong with the smaller firms, may ultimately result in their closure and potential loss of jobs.

Read the full interview on The Malta Business Weekly here.