Malta should ensure the effective supervision of internationally-oriented business by financial institutions in cooperation with the host supervisors in the countries where they operate, the European Commission warned today.
The Commission report pointed its finger at the Malta Financial Services Authority: "The supervision of the internationally-oriented business is, however, challenging. The financial sector carries out most of its activities outside Malta. The ability of a relatively small supervisory authority to oversee a large system, in particular in the insurance sector but also in banking, is under pressure."
Its comments were aimed at financial institutions licensed in Malta, and coincidentally came just days after the publication of a report on foreign entities and individuals using Malta to evade tax, and weeks after allegations surfaced that the Ta' Xbiex-based Pilatus Bank was used to launder money.
The so-called Malta Files report released last Friday was brought up during today's midday briefing in Brussels. European Commission deputy spokesman Alexander Winterstein said the Commission “had no comment on the leaks” over the weekend that claimed Malta was being used as a tax haven.
The government should extend the scrutiny of its spending to cover the broader public sector, and that it should also introduce performance-based public spending
The European Commission issued the Country Specific Recommendations for 2017 for all member states, including Malta. They take into account the 2017 National Reform Programme submitted on April 18 and the 2017 Stability programme submitted on May 2.
It also said that the government should extend the scrutiny of its spending to cover the broader public sector, and that it should also introduce performance-based public spending.
The recommendations give guidance on what can realistically be achieved in the next 12-18 months to make growth stronger, more sustainable and more inclusive, in line with the EU's long-term jobs and growth plan, the Europe 2020 strategy.
The recommendations are expected to be adopted by the Council in time for member states to reflect them in next year's Budget and other policies.
They reflect the Commission's findings and the discussions held with the authorities, social partners, NGOs and civil society in general during a number of meetings and events held both locally and in Brussels starting in October and ending only recently.
Read: 2017 Country-Specific Recommendations for Malta