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Can you imagine how stressful life would become if you suddenly lost all access to your bank account?
This is the reality facing hundreds, if not thousands of people in Malta, particularly foreigners, after the Malta Financial Services Authority (MFSA) froze Satabank’s assets on Monday due to anti-money laundering concerns within the bank’s operations.
Four days down the line, and these accounts are still frozen. And while the MFSA has assured clients that it has appointed EY, the controller in charge of the bank, to initiate a controlled process for the return of these deposits, time is pressing and immediate answers are in short supply.
“The bank referred us to the MFSA, which then referred us to its public notice, which contains no details,” a frustrated client told Lovin Malta. “Since the day before yesterday we’ve been able to see our bank statements but we’re still unable to move money. People like myself whose money was all in Satabank are having to rely on the generosity of others to buy food and get by.”
In its statement last Wednesday, the MFSA assured customers that their money was safe but that it would likely take “several weeks” before they are able to access it.
It added that the release of funds will be subject to unspecified controls and checks and that Satabank customers will have to provide details of another bank account in an EU/EEA jurisdiction opened in the same name as their Satabank accounts.
Following this statement, Lovin Malta sent the MFSA a list of questions:
- Who do Satabank clients have to approach if they want to withdraw their money?
- What are the controls and checks that will be imposed on clients before their funds are released?
- Around how long will clients have to wait before the transfer of funds is complete?
- Will they be able to withdraw all their money at once or will there be any restrictions?
- Will clients who don’t have another bank account in an EU/EEA jurisdiction be allowed to withdraw their money in cash?
However, a spokesperson for the MFSA said it had nothing to add to its latest public notice at this stage and EY didn’t respond to a request for comment as of the time of writing.
Although the case has echoes of the MFSA’s clampdown on Pilatus Bank earlier this year, its impact on depositors is way more severe. While Pilatus was an investment bank, Satabank is a retail bank, the regular daily bank for several residents of Malta.
It is unknown what exactly led the MFSA to take such drastic action against Satabank but the warning signs were certainly there. The bank was last year named by a Sicilian prosecutor as having been used by fuel trader Gordon Debono to receive illicit payments through his Maltese company as part of a major fuel smuggling ring. Debono and former Malta international footballer Darren Debono, who was arrested in Sicily alongside him, as well as a third Maltese national were eventually slapped with US sanctions as part of a clampdown on oil smugglers in Libya.
In June, the MFSA and the Financial Intelligence Analysis Unit (FIAU) launched a comprehensive investigation of Satabank’s compliance with anti-money laundering and terrorist financing laws. A month later, the MFSA fined the bank €60,500 after finding it in breach of risk management laws following a separate investigation.
Gordon Debono allegedly used Satabank to receive illicit fuel smuggling payments
Malta’s financial services industry has received a fair amount of flak from European institutions in recent months and the country can ill afford another major banking scandal. Yet there is another side to the Satabank story, as the bank was renowned as the bank of choice for foreigners who encounter difficulties setting up accounts with one of the island’s major banks. These include iGaming companies, who other banks often view as too risky clients, and self-employed foreigners.
“People working in Malta ideally need a Maltese bank account because paying tax in Malta while banking in another EU country isn’t ideal for tax declarations,” a Satabank client told this website. “I don’t know how Satabank treated other clients, but they were thorough with me, and I had to show them tax, VAT and NI documents and copies of my passport and ID card before I could open an account. The problem is that other Maltese banks go beyond the legal requirements when setting up bank accounts for foreigners.”
“Now that Satabank is gone, many of us are terrified. Even Revolut isn’t always ideal for Maltese businesses. I don’t get how the government is trying to attract more foreign businesses to Malta but isn’t also improving the banking environment here.”