The Financial Action Task Force (FATF) is known for being a global anti-money laundering watchdog, responsible for setting international standards to prevent illegal financial activities.
After the vote taken yesterday among the FATF Task Force, the results showed a resounding agreement to list Malta on the Grey List of untrustworthy jurisdictions. The FATF updates two types of lists, the grey and the blacklist. In particular, the Grey List includes countries that have a high risk of money laundering and terrorism financing. When a country is put on the Grey List, an increase is shown in the FATF monitoring, publishing reports on the countries’ progress.
Malta’s Financial Minister, Mr Clyde Caruana, flew to Germany to attend the FATF plenary. The countries which voted against Malta included the United States of America, the United Kingdom and Germany. Disappointment amongst Maltese politicians arose after such results, considering that last month’s Moneyval conclusions declared that Malta was clear.
The International Monetary Fund published a study in the previous month which stated the impacts a country is likely to experience when placed on this Grey List. The common impacts published were a decrease in foreign direct investments, an increase in issues related to bank de-risking and a decrease in investor confidence. This implies that Malta requires to take severe initiatives in its fight against financial crimes.
Whether on the Greylist or Blacklist, a country will still suffer tremendously from a global perspective. The most impacted sectors will be the financial services, banking and the gaming industry. Another impact will be on the Maltese economic recovery from the Covid-19 pandemic, as this becomes more complex.
The Maltese Prime Minister, Dr Robert Abela, needs to put forth a new mandate to straighten things out, with the objective of clearing Malta’s name and maintaining the outstanding economic results we have obtained in recent years.