The European Commission has announced it will be ushering in a series of binding demands to force Malta into tightening its anti-money laundering efforts.
Malta will be the first member state this power is used on.
Hoping to remove the “systematic weaknesses” the European Banking Authority (EBA) found in Malta’s FIAU, this action was announced by the EU’s Justice Commissioner Vera Jourova in an interview with the Financial Times.
“We will react because the EBA’s report has concrete proposals for improving the functions of [Malta’s] financial intelligence unit,” she said, referring to a report published by the EBA last July. This report was first started after a call for an EU investigation was made by the PANA Committee following the arrest of Pilatus Bank owner, Ali Sadr.
The Commission’s official comments will be binding for Malta, and the FIAU will have just 10 days to get everything in line.
“The situation obliges us to come with an opinion.”
This call for action comes just a few days after Vera Jourova posted a much more diplomatically-worded tweet on Monday about her meeting with Malta’s Minister for Finance, Edward Scicluna.
Scicluna in turn has said that the government is already in the process of fixing these shortcomings, but admitted that Malta cannot keep “dragging its feet” on such a serious issue.
Today @edward_scicluna updated me on Malta’s plans to strengthen its framework against money laundering. I stressed the need for all EU countries to fully implement EU rules on this serious issue. pic.twitter.com/XV0CbCZLV9
— Věra Jourová (@VeraJourova) October 1, 2018
The Commission’s decision also comes the same week Sven Giegold vowed to campaign for HSBC to leave Malta completely if the island didn’t get harder on tackling money laundering. On a broader scale, the EU has also been working to fight a few scandals across Europe in 2018, including ING in the Netherlands and ABLV in Latvia.