It is in our national interest and in line with our values not to let our country be abused by those who want to launder their dirty money through Malta. Small countries like ours are often lectured to and told to really commit themselves to fighting international organized economic crime.

So, it was really a breath of fresh air last December when during her address to the Summit for Democracy, US Treasury Secretary Janet Yellen, honestly admitted: “…  right now, the best place to hide and launder ill-gotten gains is actually the United States. And that’s because of the way we allow people to establish shell companies…. since the early 20th century, some states have allowed anybody to establish a shell company without disclosing who really owns it, what we term ‘the beneficial owner’.”

She also said: “In the popular imagination, the money laundering capitals of the world are small countries with histories of loose and secretive financial laws.”

“The U.S. financial system is the backbone of the world economy. Enormous amounts of illicit funds can pass through – or land – in our markets. But just because bad actors want to launder money through the United States does not mean we need to make it easy for them.”

“There are far too many financial shadows in America that give corruption cover. We need to throw a spotlight on them, and that is what we are doing through many of the measures that are part of the government’s holistic strategy to combat corruption, which we released this week.”

Janet Yellen spoke of the need for the US to lead by example: “If we want free institutions to thrive the world over, then first, we must model what they look like at home.” We look forward to all the major countries setting a good example to small countries like ours. So far, the most vociferous ones about the need to combat international economic crime have been putting into practice the proverb: “Do as I say not as I do.”

Last year we organized ‘The Malta Workshops’ to explore and discuss together with countries from all over the world:

-         the particularities of small international financial centres,

-         the associated challenges they face in ensuring financial flows are legitimate and transparent,

-         and areas where increased cooperation between our jurisdictions and our combined efforts would bring about tangible results in creating a layer of defence against money laundering and financing of terrorism.

Malta’s achievements over the past decades, from acquiring independence, becoming a republic, the closure of foreign military bases, acquiring neutrality, achieving a sustainable economy, EU accession, social services, education and health services, are at the very core of what Malta is today. So many times we have had to reinvent ourselves as different economic activities in Malta passed through their growth cycle. We are again at the crossroads, as together with the rest of the world we need to develop a new business model after the pandemic and move to a new life style and models of consumption and production based on clean renewable energy.

We have implemented a wide-ranging governance reform programme to address our weaknesses and system failures.  These reforms are now delivering tangible and visible results. We are determined and committed not to compromise or row back on these reforms. They are here to be strengthened and built on.  They are here to stay.

But as we look at ourselves and the world around us, we know that however much we change and introduce new measures, we can never be complacent when we come to good governance and the fight against national and international economic crime. Good governance is fragile. It must always be defended. We must be ever vigilant.

Malta, like many other countries and islands with limited geographic territory, is highly dependent on its tourism and financial industry as national revenue generators. A balance needs to be maintained between the quest by small international financial centres to grow their financial industry, including through innovative business concepts, and the need to fully and sustainably mitigate the oftentimes elevated risks that arise from such business concepts.

A united front

Sound financial governance in relation to anti-money laundering, as well as cooperation between countries in response to transnational criminal activity cannot be a stand-alone effort. We need to nurture a national and international eco-system to fight it.

At the national level, we all need to do our bit: the political parties, the business associations, the professionals, the media, the whole education system, the unions, the churches.

There must be a united front of political parties, business organisations, professional and civil society against criminal networks. Institutions will be as honest as the people in them, so from a very young age the values of honesty and integrity need to be nurtured among our people, through example and not just nice words.

We are as strong as the weakest link in our countries. We will lose our sovereignty and democracy if we allow the hidden webs of informal and illegal power to win over the political parties and the country’s institutions. The shell of a sovereign state will be in the hands of elected government and the national institutions, but its soul will be in the hands of criminal networks.

As Italy’s President Sandro Pertini used to say: “God forbid that anyone defends corrupt people, out of loyalty or solidarity to their Party. In doing this the friendship within the party becomes complicity and omerta’. I repeat that people like these, dishonest and corrupt, should be put aside, because they offend the Italian people. They offend millions and millions of Italians who, in order to live an honest life, make huge sacrifices, they themselves and their families.”

A democratic country that wishes to be run in an honest way needs media that investigates and criticises, as much as it needs a parliament to keep government under scrutiny, a serious opposition, independent law courts, honest regulators and a police force that operates without fear or favour.

Similarly, the country needs citizens who think independently and organise themselves in civil society to take an active part in the way society is run.

Every country’s effort in the fight against economic crime, money laundering and financing of terrorism must necessarily be complemented by a wider framework of cooperation and collaboration with our regional and international partners. Global challenges can only be addressed jointly, through a collective effort.

 Evarist Bartolo, Minister for Foreign and European Affairs