MEPs publish final Panama Papers report: nine main takeaways on Malta

1. Malta was the only EU member state with a government minister named among the PEPs mentioned in the Panama Papers; but Malta saw no police investigation despite evidence from the Financial Intelligence Analysis Unit of serious risks of money laundering. “This lack of investigation has prevented the possibility of identifying, and if necessary sanctioning, intermediaries in Malta who may not have been compliant with their obligations, including customer due diligence (CDD).”

2. The PANA committee condemned the failure of the Commission to investigate further as regards possible non-compliance by Malta with the AMLD (anti-money laundering directive), despite this being brought to its attention.

READ THE FULL REPORT HERE [PDF]

3. The MEPs said Pilatus Bank in Malta as well the Berenberg bank in Germany did not adequately carry out the mandatory enhanced CDD measures, whether upon the establishment of the business relationship with their clients or during that business relationship, even when there was a suspicion of money laundering; highlights, therefore, the failure to report or uneven reporting on the part of obliged entities of suspected cases of money laundering to the competent FIUs.

4. Malta also failed to respond to the questionnaires for EU Finance and Justice Ministers of 25 states. “The fact Malta and Hungary have failed to respond and that Malta, which held the rotating Presidency, was particularly uncooperative.”

5. The Maltese tax system was described as being “very attractive and in line with current international and EU standards as regards harmful tax competition.” But finance minster Edward Scicluna admitted that the Maltese tax system can be prone to abuse and confirmed that Malta disagreed with Commission proposals on specific tax issues (common tax base).

6. There is a high number of intermediaries from Malta involved in the Panama papers, with some intermediaries having worked with politically exposed persons in Malta. Nexia BT, which worked with Mizzi and the PM’s chief of staf Keith Schembri, refused to appear and did not satisfactorily answer the questions raised in writing.

7. Malta has transposed EU rules and respects OECD standards in terms of transparency, fight against tax fraud and money laundering.

8. But “the institutions in charge of implementing and enforcing rules as regards tax fraud and money laundering are highly politicized. The press is also highly politicized.”

9. The police in charge of prosecuting the FIAU investigations “is not well equipped to fulfil its task optimally, possibly suggesting a case of maladministration. Especially, the number of convictions and confiscations seems extremely low in relation to the on average number of reports sent to the police by the FIAU (during the period 2013-2015).”