Minister accuses Brussels of picking on ‘tiny Malta’ over Pilatus failures

Malta’s finance minister Edward Scicluna has accused the European Commission, egged on by the Maltese MEP David Casa (EPP), of pushing the European Banking Authority to take action against the Maltese financial intelligence analysis unit (FIAU).

The FIAU got itself in breach of the third anti-money laundering directive for not following the correct procedures in its compliance exercise for the private bank Pilatus, whose chairman Ali Sadr Hasheminejad was arrested in the United States in March.

Iranian-born Hasheminejad is accused of breaching US sanctions on Iran and of laundering the proceeds of his family business’s construction group in Venezuela. His arrest prompted the suspension of the Pilatus bank licence by the Maltese financial regulator (MFSA), but last week the EBA issued a scathing verdict on the way the FIAU had carried out a 2016 compliance exercise on the bank.

Edward Scicluna is however claiming that the EBA was forced to act in the way it did because of the European Commission.

“The pressure on the EBA to rush and act in the AML field for the first at EU level and make of the Maltese institution an example to show that the European financial regulator has the muscle to cope with AML issues as well, came from the Commission.

“In turn the political pressure on the Commission came specifically from three MEPs, pushed by Malta’s David Casa,” Scicluna wrote in The Times.

Scicluna said “tiny” Malta had been singled out for system procedural failures for just Pilatus Bank, when bigger EU member states and their banks “continue being associated with thousands of real and proven AML transgressions, valued at several billion.”

He also accused the Opposition Nationalist Party of being “elated” at the news, accusing them of employing a “dog-eared plan to bring down the government”.

“They intend to extend this tactic further by pressuring MONEYVAL prior to their coming down to Malta in November,” Scicluna said, referring to the visit by the Council of Europe’s committee of experts on anti-money laundering.

“These MEP’s ‘rule of law’ book does not seem to prohibit them from pressuring Malta’s judiciary and other independent local and European regulatory institutions into imposing sanctions on anything connected to Pilatus Bank, whom they decided to lynch many moons ago.”

Scicluna also accused the Nationalist MP Mario de Marco – who gave a press conference demanding the finance minister’s resignation – of representing the Italian gaming company Fenplay, which had alleged ‘Ndrangheta criminal connections and sought by European arrest warrant for money laundering. “During a given morning in summer 2015 while representing the Opposition in the delicate task of amending with me the country’s anti-money laundering legislation, [De Marco] rushed out in the middle of the meeting to go to Mirehel to threaten those same national regulatory authorities whom we were supposed to strengthen, with a court case in the defence of his professional clients… Fenplay.”

David Casa reaction

The Nationalist MEP David Casa accused Scicluna of protecting minister Konrad Mizzi and the PM’s chief of staff Keith Schembri, who were implicated in the Panana Papers scandal. “Two Maltese politicians wanted to get rich quick off the backs of hard working Maltese people. To do that they needed a crooked bank (Pilatus), and a crooked accountancy firm (Nexia BT). And when they were caught they needed our regulatory authorities to look the other way,” Casa said.

He said the suggestion that the EBA’s statement arose due to his influence in Brussles was “testament to the minister either being in a state of severe delusion, or an unwillingness or inability to address the real issues. Either way it is clear that he is not man to clean up the mess he himself created and should resign immediately.”

Casa said Malta’s institutions had been compromised and Scicluna’s job was to ensure that the institutions for which he is responsible protect Maltese citizens and not corrupt politicians. “And my job is to hold him to account for his dereliction of duty. I will continue doing my job. Regrettably it is painfully clear he is incapable of doing his.”