The European Banking Authority (EBA) has accused the Maltese Financial Intelligence Unit (FIAU) in a damning report on the handling of Pilatus Bank of systematic shortcomings in the enforcement of EU anti-money laundering rules. Pilatus Bank was at the center of reports by the murdered journalist Daphne Caruana Galizia on allegations of corruption and money laundering by Maltese government members. EBA writes that the shortcomings in the work of the FIAU are not limited to the Pilatus case. Although the FIAU has now drawn up an action plan to revise its working methods, „these measures are not enough to be satisfied that the deficiencies that led to a breach of Union law have been resolved“. Following the findings of the EBA, the FIAU has ten working days to explain how it intends to improve its activities and ensure compliance with EU law. If this is not the case, Article 17(6) of the EBA Regulation (EU) No. 1093/2010 ultimately empowers the EBA to issue direct recommendations to Maltese banks to comply with EU rules.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
„Malta has a systematic problem with compliance with European anti-money laundering rules. It is no coincidence that the authorities did not pursue the allegations of inadequate customer due diligence and did not impose sanctions. The Maltese government itself is involved in the Panama Papers and is still blocking a serious consequences.
In view of the systematic violations of European anti-money laundering rules by the Maltese Financial Intelligence Unit, the EU Commission can no longer hesitate to initiate infringement proceedings against Malta. The EU Parliament had sharply criticized the inadequate enforcement of European rules in the Member States. European governments, however, have so far resisted tighter controls of national authorities.
Malta is not the only EU Member State to have serious problems with money laundering in the financial sector. The EBA should now also take a closer look at Cyprus and Latvia after money laundering scandals in banks became known also there“.
EBA report on the systematic violations of EU law by the Maltese Financial Intelligence Unit (FIAU):