Today, the European Parliament published the report of its “rule of law” mission to Malta. The report followed the implications of members of the current government in the Panama Papers, the murder of the investigative journalist Daphne Caruana Galizia and concerns over the rule of law in Malta. The common report of a cross party delegations sheds light on serious shortcomings in the rule of law and demands tough consequences from Malta and the EU.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group and member of the Parliament’s Malta mission commented:
“Our mission found evidence for systematic and serious deficiencies in the rule of law in Malta. The European Commission should investigate our findings seriously. For the Maltese government it is now high time to finally take robust consequences after the Panama Papers and the murder of Daphne Galizia. Members of government with doubtful offshore accounts should be removed from office. The EU may not accept the deterioration of the rule of law in any member state. Corruption and financial crime has to be prosecuted effectively everywhere in Europe. Therefore, the European Commission and the Parliament should now intensify their work in the framework of Article 7 of the EU treaty.”
Link to the report as a whole: http://bit.ly/malta-report
The Recommendations of the report
During the meetings, the MEPs expressed serious concerns about the unclear separation of powers, which has been the source for the perceived lack of independence of the judiciary and the police, the weak implementation of anti-money laundering legislation, the serious problems deriving from the ‘investments for citizenship programme’, and the mentions of Maltese politically exposed persons in the Panama Papers and their continuing presence in government. Members noted the low rate of investigations and absence of prosecution by the Maltese authorities on these cases, as well as with regards to private sector actors involved, such as Nexia BT and Pilatus Bank
The delegation underlined that the rule of law in the Member States, whether it is Malta or any other EU country, is of great concern to all: “The rule of law is a matter of collective security. The brutal assassination of Daphne Caruana Galizia was aimed at instilling fear in everyone, especially those involved in investigating and prosecuting cases of money laundering and corruption.”
AT THE EUROPEAN LEVEL:
- The European Commission should assess whether Maltese authorities are fully compliant with the European Anti-Money Laundering directive and the Capital Requirements Directive, especially regarding the application of customer due diligence provisions;
- The European Banking Authority should assess whether the MFSA is fully equipped and free from conflicts of interest to perform its supervisory duties;
- The European Banking Authority should assess whether the MFSA has fulfilled its obligations as national supervisory authority in view of the apparent lack of action against Pilatus Bank and Nexia BT that continue to hold a license to provide services in the EU;
- The European Central Bank and the European Banking Authority should investigate whether the fact that Pilatus Bank continues to hold a license to operate in the EU warrants ECB/EBA intervention;
- The European Commission should take note of the recent report made by Mapping Media Freedom with regard to SLAPP practices currently being used by Pilatus Bank and Henley & Partners and actively ensure the protection of media freedom and journalism across the EU by proposing legislation that would curtail these abusive practices;
- „The European Commission should assess the implications of the IIP (Individual Investors Programme) through which Malta sells European citizenship and Schengen Residence permits, for distortion of the Internal Market and attempt against the security of the European Union, fomenting corruption, importation of organized crime and money laundering. The Commission should also assess fiscalincentives which treat local income of individuals or corporations differently than international income.”
AT THE NATIONAL LEVEL:
- Persons perceived to be implicated in serious acts of corruption and money laundering, as a result of Panama Papers revelations and FIAU reports, should not be kept in public office and must be swiftly and formally investigated and brought to justice. Keeping them in office affects the credibility of the Government, fuels the perception of impunity and may result in further damage to State interests by enabling the continuation of criminal activity.
- Work is needed to ensure stronger checks and balances in the Maltese legislative framework to better separate powers and to limit possible interference of the Prime Minister in the judiciary and the media; an assessment of media pluralism and independence from political power should be conducted.
- The functions of Chairman of the MFSA and the function of promoting investments into Malta should be decoupled;
- Reform the Attorney General functions, to decouple the role of advisory to the government from the role of prosecution;
- Reform the Judiciary, namely on the basis of recommendations made in 2013, in order to reinforce the separation of powers and the independence of the Judiciary;
- The Police Commissioner should no longer be appointed by the Prime Minister but by an appropriate independent body. Similarly, the veto power of the Prime Minister should no longer exist regarding the nomination of the Maltese Chief Justice;
- The Whistleblower Protection Act should be revised to cover workers in the public sector. Mr Ferris should be granted police protection and serious consideration should be given to his application for protection under the Whistleblower Protection Act;
- The Maltese Government should separately publish the list of persons being granted Maltese Citizenship under the Individual Investment Programme and should start an independent assessment of this programme and of the anti- money laundering procedures applied to it;
- The Maltese Government should start an action programme against corruption and financial crime and increase the number of investigations and prosecutions. This should include special units in police and judiciary with sufficient and highly qualified staff;
- Civil society organisations and any Maltese citizens should be encouraged to provide evidence and bring formal complaints to the Police forces, FIAU and MFSA, regarding white collar crimes and money laundering in Malta, in order to trigger criminal investigations.
- An investigation is needed over the alleged influence of elections through increased hirings in the public sector, issuance of construction permits and regularisations of irregular constructions, as well as pay increases and promotions in the military
- An investigation is needed on allegations of the smuggling of Libyan petrol;
- Reassess the importance for Malta joining the EPPO in order to work together with participating MS against EU fraud and other crimes affecting the Union‘ financial interests. “