The talk of town when it comes to the economy and financial matters is the possibility of Malta’s greylisting by the financial action task force overseeing the execution of initiatives in the Moneyval report.
I have been working in the financial services sector for the past 20 years – long enough to know what all this means and the implications on our industry should Malta be greylisted.
The image a country portrays in this industry is undisputedly key and vital for success.
The product we collectively created and promote is subject to ongoing debates within the EU, but we are not alone. Ireland, Luxembourg, Cyprus, the Netherlands, the UK and others offer what Malta offers. So why and how did we end up in this position?
Without wanting to sound too dramatic, I think that at this point only sheer luck can see us avoiding greylisting. The utopian scenario for me would be that Malta avoids greylisting, learns from its past and uses this near miss as a catalyst to implement the necessary changes, the ones that really matter.
So, what is the level of probability that the financial action task force will decide to greylist Malta?
The level of probability should be viewed when examined against the expected deliverables from the government in terms of policy and legislation, increase in capacity, capabilities, and skills to implement and demonstrate the actions taken.
Realistically, all this can only be assessed over several months up to possibly, two years. Given all these elements at play, I can only see Malta continuing to be possibly greylisted until it can demonstrate that the changes are being effective and leading to tangible results including enforcements and prosecutions.I believe that greylisting Malta is a necessary evil– Mark Aquilina
This is not a blame game but for all those wondering why Malta may be greylisted, one only needs to look deep into Maltese culture and the persistent prevalence of a ‘nonchalant’ and ‘make hay while the sun shines’ attitude. This, coupled with the fact that while our financial services industry kept growing, this growth was hardly ever matched with the necessary resources, political vision, expertise and innovation and for many, the very concept of rule of law came with a level of risk.
We might be independent as a nation, but we are surely not independent when it comes to governing ourselves and, as a country, we still need to come to terms with the fact that we must ‘fall in line’ if we want to operate in the international regulatory framework. Therefore, I believe that greylisting Malta is a necessary evil. It will probably be the only way for people to understand the importance of good governance, of operating ethically, transparently and within the realms of the rule of law.
To not greylist suggests that all is perfect and back to normal. So, let us not act naïve because those tasked with reviewing Malta’s response to Moneyval are certainly not. And they will want to see concrete actions set in motion, changes being effected and tangible results reached.
We need to go back to basics and start by admitting that we collectively failed! We then need implemented commitments set out as a direct response to the report. There must be an independent entity with wide powers to monitor all government policies being implemented, including government agencies which have responsibilities for enforcement and reporting to the Moneyval commission.
We need full transparency on the work being done and results achieved and corresponding failures available to the public for transparency and accountability. In my opinion, this entity should be composed of foreign experts, parliamentary representation and headed by the President.
The push needs to be supported by a major cultural change within government, business and society to act more ethically. It will take a generation or two because young people seem discouraged and have little confidence in our institutions. Therefore, any changes will take long before confidence can start being restored.
We speak from experience because selling Malta as a financial services centre was always a delicate matter. But now it became even trickier, though not impossible.
We could easily look at the Malta Gaming Authority, where although it had its downfalls along the years, was always forward-looking and open to improvement.
Over the past years, there have been cowboys who pushed the ‘envelope’ and conducted business outside the current legal, accepted regulations. They will have to endure aggressive enforcement.
They might blame their losses on the pandemic and not from corrupt practices. That is up to them.
But for the sake of the many businesses and financial services operators who, like us, have always contributed positively and ethically to the growth of this industry, doing things right is not only a must but something we should expect from all those tasked with clearing Malta’s name.