FIAU’s action plan to EBA ignored in Brussels as Commissioner slammed agency

Malta’s anti-money laundering watchdog is miffed because a detailed action plan it submitted more than two months ago to address shortcomings appears to have been ignored in Brussels.

The Financial Analysis Intelligence Unit submitted the plan in July, 10 days after the European Banking Authority flagged shortcomings over the watchdog’s handling of Pilatus Bank.

But after hearing nothing from the EBA, last week European Justice Commissioner Vera Jourova surprised the Maltese authorities when she told the Financial Times that the Brussels executive will be issuing a binding opinion.

Jourova had not raised the subject with Finance Minister Edward Scicluna and Parliamentary Secretary Silvio Schembri in two separate meetings held a few days before she spoke to the media.

Alfred Zammit, deputy director at the FIAU, has told MaltaToday Jourova’s statements caught the agency by surprise, particularly when she told the FT the FIAU had failed to take on board the EBA’s recommendations.

“This is not the case because we did take the EBA’s recommendations very seriously and soon after they were released, the FIAU reviewed its already existing action plan to ensure it fully addresses the issues raised by the EBA,” Zammit said.

A “granular step-by-step” action plan that included target dates and clear deliverables for each of the recommendations made was submitted to the EBA on 25 July, he added.

But more than two months later the FIAU only received an acknowledgement of receipt from the EBA.

“To date, notwithstanding that more than two months have now passed, and notwithstanding that the FIAU expressed its willingness to cooperate, meet and discuss with the EBA the FIAU’s approach in addressing their recommendations, the EBA has not provided any reply nor any feedback whatsoever to the action plan other than an acknowledgment of receipt,” Zammit said.

He insisted the FIAU was implementing the action plan and intended to provide regular updates to the EBA on the status of its implementation.

“The FIAU does not know why Commissioner Jourova told the FT that the FIAU failed to take on board the EBA’s recommendations and what assessment the Commission may have made to reach its conclusion,” Zammit said.

The European Commission had never been in contact with the FIAU on the matter and never sought information or explanations from the agency.

“The FIAU therefore cannot understand what has led the Commission to pursue this course of action which comes as a complete surprise to us,” Zammit said. The FIAU got to know about Jourova’s intended course of action last Wednesday from the newspaper report.

“The FIAU would have been more than willing to enter into discussions with the EBA and/or the European Commission on this matter and believes that the Commission should have taken this up with the FIAU prior to reaching any conclusions and prior to revealing its intended course of action to the media,” Zammit added.

It is understood that Jourova’s decision to go to the media with such a damning statement without the decency of raising the subject with Malta’s authorities has angered the government.

To date the European Commission Cabinet has not received any recommendations for discussion from Jourova.

The case concerns the mishandling by the FIAU of Pilatus Bank in 2016 when an on-site inspection at the Ta’ Xbiex-based bank had flagged serious shortcomings.

Internal FIAU reports on the bank had been leaked to the Maltese media last year when the Egrant allegations surfaced.

Pilatus Bank was thrust in the international media spotlight earlier this year when its owner and chairperson, Ali Sadr Hasheminejad was arrested in the US and charged with sanctions busting against Iran.

It was after Hasheminejad’s arrest that the Malta Financial Services Authority moved in on the bank and appointed an external controller while freezing its operations.

The MFSA is in the process of withdrawing the bank’s licence.