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11 Things You Need To Know About The PANA Committee’s Final Report

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The EU PANA Committee’s final report into the Panama Papers has just been released. After the committee had visited Malta on 20th February of this year, and met and spoken to key figures in Malta’s political sphere, they had a few key findings that have now been published. 

1. Keith Schembri cancelled last minute on them

The PANA delegation sent to Malta met a bunch of important people, like Minister of Finance Edward Scicluna and MFSA chairman Joe Bannister as well as representative of the FIAU (Financial Intelligence Analysis Unit) and the police. 

OPM Chief of Staff Kieth Schembri cancelled on the delegation around 2pm, when they were scheduled to meet. He also questioned the whole mandate of the PANA committee. 

2. Malta’s tax system is in line with standards, but prone to abuse

Malta’s tax system was deemed to be “very attractive” but was found to be in line with current international and EU standards. 

However, Edward Scicluna once said that Malta had some disagreements with the European Commissions proposals on certain tax issues, and admitted that the the “Maltese tax system can be prone to abuse”.

3. Nexia BT refused to meet the committee

Apart from specific individuals, there were a number of organisations that the committee met. Nexia BT, the controversial intermediary company run by Brian Tonna, refused to meet the committee and did not satisfactorily answer questions given to them. 

4. Malta is suitably transparent

Malta as a whole was deemed to be properly fighting tax fraud and was found to have transposed EU rules and currently is respecting OECD standards in terms of transparency and the fight against tax fraud and money laundering. 

5. Malta’s institutions are highly politicised 

Coming as no surprise, in part due to Malta’s Constitution, a lot of Malta’s core and peripheral institutions were found to be highly politicised, and this at that times jeopardised the proper execution of their duties.

Especially damning was the finding that the institutions in charge of implementing and enforcing rules as regards tax fraud and money laundering are highly politicised.

6. The media is also highly politicised

With partisan TV channels, radio stations and newspapers, Malta’s traditional media system is coming under more and more scrutiny. Malta’s media was found to be politicised, meaning the messaging on these platforms was biased in favour of a political party.

7. The police might not be doing their job

The Financial Intelligence Analysis Unit (FIAU) is tasked with investigating tax fraud and financial crimes, but the police are in charge of prosecuting these investigations. This led the PANA committee to believe the lack of arraignments was a result of “maladministration”. 

The committee noted that convictions and confiscations were very low during the 2013-2015 period, considering the number of reports by the FIAU sent to the police.

8. Tax compliance unit suffers from lack of resources

When the PANA committee met with the tax compliance unit they were told by the unit that they didn’t have enough resources to properly deal with the “spontaneous exchange of information” that policies such as the EU Directive on Administrative Cooperation requires.

The committee noted that due to this lack of resources the unit might not be able to fulfil its duties.

9. Pilatus Bank remains shady

Alongside Berenberg bank in Germany, Pilatus Bank was found to have not adequately carried out the mandatory enhanced CDD (Customer Due Diligence) measures, whether upon the establishment of the business relationship with their clients or during that business relationship – even when there was a suspicion of money laundering.

10. Malta was found to be “particularly uncooperative”

The Finance and Justice Ministers of 25 EU states were sent a questionnaire by the Committee – however, only Malta and Hungary didn’t respond to the questionnaire. It was also noted that even while Malta held the rotating Presidency, they were found to be “particularly uncooperative”.

11. Malta is the only member state with a government minister named in the Panama Papers

Minister for Tourism Konrad Mizzi was the only EU member state government minister among the PEPs mentioned in the Panama Papers.

However, no serious investigation into the possibility of money laundering was ever held by the police or FIAU. The committee noted that “this lack of investigation has prevented the possibility of identifying and sanctioning intermediaries in Malta who may not have been compliant with their obligations, including CDD.”

The government has already responded to the PANA Committee’s report, refuting any claims that Malta is a tax haven, and pointing out that the report reiterated Malta’s transposition of EU rules and OECD standards in terms of transparency, fight against tax fraud, and money laundering.

Prime Minister Joseph Muscat has also promised to increase resources for regulatory bodies in Malta. 

Which of these do you think is the most important? Let us know in the comments below.

READ NEXT: Heads Of Global Media Call For EU Inquiry Into Malta

Johnathan is an award-winning Maltese journalist interested in social justice, politics, minority issues, music and food. Follow him at @supreofficialmt on Instagram, and send him news, food and music stories at [email protected]

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