According to sources quoted by The Sunday Times of Malta, Malta failed the Moneyval preliminary test. The same sources reported that Finance Minister Edward Scicluna is not losing sleep over the matter because, the article states, the report can be reversed prior to being formally approved in the plenary session of Moneyval in July this year.
In a weak attempt at defending the Socialist government he forms part of, the minister later had the gall to suggest that the Opposition is rejoicing at the leaked report.
Moneyval is the committee of experts on the Evaluation of Anti-Money Laundering Measures at the Council of Europe. They run tests on countries, roughly in five-year cycles. Their visit to Malta last November was not a surprise. The experts came in a pre-organised visit to evaluate Malta’s level of compliance with the Financial Action Task Force 40 Recommendations and the level of effectiveness of Malta’s AML/CFT system, and provide recommendations on how the system could be strengthened.
The government mobilised its entities and authorities to try and impart a positive impression on the visiting experts. Despite these efforts, the government did not manage. The experts came, saw and were unimpressed. They left with a very negative opinion of Malta, which was articulated in the draft report leaked to this newspaper.
I am informed that this was, in fact, the fifth Moneyval report specifically on Malta, with the last one carried out in 2012. In previous reports, Malta fared reasonably well.
The minister gave the impression that it is common for countries to overturn or significantly revise the experts’ opinion prior to their report’s final approval. This is not the case. Although a country can make representations to change fine details of certain aspects, it is unusual to change the very substance of reports of this nature for an audited entity, in this case Malta. The experts’ opinion normally stands and will only be changed marginally, if at all.
Our country is no longer a democratic State. Our institutions have failed
The spin mastered by those who leaked the report in the first place was to minimise the gravity of the situation, particularly by saying that Prof. Scicluna is not losing sleep over the report He should be losing sleep over it. If the opinion is confirmed, Malta risks being put on a blacklist. We will have a year’s grace to rectify areas marked as low or moderate. If we fail to do so there will be several severe repercussions, including our banks losing their corresponding banks.
Any new foreign clients coming to Malta will be subjected to additional screening. Prof. Scicluna is fully aware that the European Commission and other international bodies consider Moneyval’s opinion as the definitive opinion on money laundering. This is the expert opinion that matters. This is a high priority matter that must be addressed to avoid serious and irreparable damage to our financial services sector.
Despite the gravity of the situation, the government seems more interested in PR and how to limit the damage caused.
Moneyval reports are not published prior to being formally adopted. The only entities that have draft copies of the report are a few government institutions in the country under review, including the Finance Ministry. The government carried out a controlled explosion of a bomb that will seriously further dent its reputation. In so doing, the government has put Malta further in harm’s way. The leak itself will reaffirm Moneyval’s opinion that our State institutions are not functioning as they should.
On the same day the Moneyval report was leaked, another report, allegedly penned by the FIAU, was leaked. It featured next to the Moneyval story in this newspaper. It is indeed a sad day for democracy when State institutions are used to politically attack the Leader of the Opposition, to punish me for taking on the fight against this corrupt government.
Our country is no longer a democratic State. Our institutions have failed. We no longer have a system of checks and balances between the legislative, executive and a judicial branches. The lines between the political and administrative arms of government have been blurred to an extent that one can no longer determine which is which. These are the conclusions that are being reached by international institutions and organisations, including the European Parliament, the European Commission, the International Monetary Fund and now Moneyval.
The Nationalist Party is doing everything within its power to fight this rot against a government that is well funded and backed by State resources. In these circumstances, I urge all those with a voice to stand up and be counted. Use whatever voice you have, not least your vote, to send a message to this government that you will not stand idle while our democracy rots. Unless we, the people, do something, we are losing our country to a gang of crooks that have hijacked our institutions.
Adrian Delia is Leader of the Opposition and the Nationalist Party, and Shadow Minister for Justice and Good Governance.
This is a Times of Malta print opinion piece