MEP insists ECB still assessing request to withdraw Pilatus licence

Members of the European Parliament who visited Malta on a “rule of law” fact-finding mission are to reiterate a call to the European Central Bank (ECB) to withdraw Pilatus Bank’s banking licence in Malta.

Earlier this week however, a spokesperson for the ECB told MaltaToday it had no supervisory oversight on Pilatus Bank, after it was contacted over news of the arrest of chairman Ali Sadr Hasheminejad in the United States on charges of breaching US sanctions against Iran. “The ECB does not supervise this bank and any action must therefore start from the MFSA,” a spokesperson told MaltaToday.

The MFSA has since frozen all asset movements in the bank by its directors and shareholders. Casa has called the action “farcical”.

The spokesperson said Casa was told by the ECB that it could not act on the matter. “We are aware of the allegations, but this is a bank-specific issue and something in the court of the MFSA,” the spokesperson told this newspaper.

A spokesperson for Casa is however contesting the comment as a definitive reply to the MEP, and cited the legal grounds empowering the ECB to fully intervene in the matter and withdraw the private bank’s licence. “The ECB has a duty to intervene. Pilatus has made government corruption possible. It is the financial intermediary that receives, conceals and transfers illicit funds. Any continued operation of this bank implies the possible continuation of criminal activity. The bank must be closed down.”

Hasheminejad’s arrest by a New York district attorney on bank fraud, money laundering and breach of US sanctions was unconnected to the complaints Casa first had filed with the ECB.

In April 2017 the bank was implicated in the Egrant magisterial inquiry, kick-started on a complaint by the Prime Minister into allegations by the late journalist Daphne Caruana Galizia that the bank had processed a $1 million transaction from the Aliyev ruling family of Azerbaijan, to his wife.

In his letter to the ECB Casa was unequivocal about the bank run by Hasheminejad, who holds a St Kitts & Nevis passport, and is the son of one of Iran’s richest men, banker Seyed Mohammad Sadr Hasheminejad. “The fact that the evidence directly links the Office of the Prime Minister of Malta to Pilatus Bank suggests that this money laundering outfit will continue to operate within the European Union with impunity unless the ECB uses the legal powers it has at its disposal to intervene,” Casa told the ECB.

The MEP has sent similar reports to the Council of Europe’s MONEYVAL group, as well as to the Egmont Group, which groups some 155 financial intelligence units, asking them to mark every transaction originating from Pilatus bank to be marked as “suspicious and be investigated.”

Pilatus denied hosting any accounts for the Muscat family, and provided the inquiring magistrate with its core banking platform and IT system for the investigation. The inquiry is stil ongonig.

In 2016, Malta’s FIAU (Financial Intelligence Analysis Unit) director Manfred Galdes sent a request to the Commissioner of Police to investigate suspicious transactions at Pilatus Bank. But police commissioner Michael Cassar resigned two weeks after receiving the letter in April 2016, and the investigation was never taken up.

In 2017, the classified FIAU reports were leaked, revealing a suspicious €100,000 payment from Nexia BT partner Brian Tonna, to the PM’s chief of staff Keith Schembri. A magisterial inquiry is now underway on allegations by former PN leader Simon Busuttil that the money was a kickback by Tonna on the sale of Maltese ctizenship. “The bank was used in two instances by Keith Schembri and his associates to launder the proceeds of corruption, namely from the sale of Maltese passports,” Casa said.