Malta pushed for grey-list despite higher compliance

Government top brass and senior civil servants are fearing Malta will be pushed to be grey-listed by the Financial Action Task Force (FATF) in this week’s plenary session, despite protests about its higher compliance ratings. 

Malta could become the European Unions first ever member state to be in the list that will place the enormous flow of financial transactions in and out of Malta under scrutiny. 

But experts in the field assisting the Maltese government say Malta is still one of the EU’s best performers on compliance in technical ratings. 

Like other member states, Malta has specifically zero “no compliances” in its technical compliance report, which is categorised in four pillars: non-compliant, partially compliant, largely compliant and compliant. 

But government aides and ministers have argued there are numerous other European countries with worse compliance results than Malta, all of them having avoided FATF grey-listing in recent years. 

Reports this week that the United States, the United Kingdom and even Germany want to push for Malta’s grey-listing despite a clean bill of health from Council of Europe’s Moneyval, is worrying the Labour administration. 

In 40 FATF technical scores, Malta has zero ‘non-compliant’ or ‘partially-compliant’ areas. 

Yet according to the data itself published by the FATF, the United States itself has four ‘non-compliant’ ratings and four ‘partially-compliant’ ratings. 

And numerous other EU member states have far worse ‘partially-compliant’ grades, yet have not been grey-listed: Slovakia has 16 partially-compliant ratings, Czechia has 11 partially-compliant ratings, Slovenia has 10 and Finland nine. 

Comparatively, in the highest-rated ‘compliant’ rating, Malta fares better with 12 ratings when compared to Slovakia’s two, Czechia’s five, Finland’s eight and Slovenia’s 11. 

It also fares better than Hungary (six ‘compliant’), Denmark (six), Latvia (seven), and Lithuania (eight). 

“At this rate, if Malta is grey-listed, the FATF is either a new, higher standard without warning and even rather subjectively. It stands to reason that states with worse ratings than Malta’s will also be grey-listed,” a senior government source told this newspaper. “If not, then Malta is being treated differently. We’re being made an example of. Naturally, the size of our economy is small within the wider EU context and not detrimental to others.” 

Malta also has its backers from other FATF members who have analysed the comparison of the ratings. 

While key members of the FATF have reassured Maltese civil servants that the process is strictly technical and does not have outside influence, key members of the Labour administration are already doubting the integrity of the process should Malta be grey-listed. 

One diplomat told this newspaper that grey-listing Malta on the back of the clear progress from Moneyval, had sent a shocking message to the administration. “Malta actually enjoys the support of almost all members at FATF. If Malta is grey-listed, it would send the message that the powers-that-be decide what happens – not the technical outcomes. Malta clearly excelled in those in a very short space of time.”