Malta’s greylisting will be subject of discussion during this week’s plenary session of the Financial Action Task Force (FATF) with well-informed sources hopeful that the country could find itself in the clear and off the grey list. 

Malta was first put on the grey list in June 2021 following years of inaction over money laundering and tax offences.

The FATF grey list – officially referred to as Jurisdiction Under Increased Monitoring – is different from being blacklisted, with greylisting binding the country to working with FATF to implement the necessary reforms. The FATF’s associates have regularly monitored the country’s progress since then.

There is a myriad of reasons why Malta was greylisted. For years, the country was digging its head in the sand over growing regulatory and enforcement concerns.

However, it has in recent years ramped up money laundering regulations and enforcement, particularly after the resignation of Prime Minister Joseph Muscat. 

Still, it was not enough to get Malta off the grey list last time around with regulators feeling that while changes had been made, the country was yet to show a long-term commitment to keeping up standards.

In February 2022, FATF has said that Malta has substantially completed its action plan, eventually visiting the country in April. There have been positive indications since then, with sources suggesting that Malta could find itself off the grey list by the end of this week. 

There are some in government who have been far more cautious, insisting that while there have been improvements, it is not guaranteed that the FATF will remove Malta from the list this time.

It remains to be seen whether the recent arrests of Iosif Galea and Ryan Schembri will play a part, particularly given the controversy around the police’s lack of action with regard to European Arrest Warrants. 

Meanwhile, the fallout of Yorgen Fenech’s arrest in connection with the Daphne Caruana Galizia case continues with former top officials at the Malta Gaming Authority being charged over the last year and in recent weeks. 

The scandals involving Muscat and his inner circle also continue to hover over Malta, particularly following the police’s search of the former Prime Minister’s home in connection with the Vitals case.

Has Malta done enough to get off the grey list?