Malta, money laundering and a murdered journalist: Too little, too late?

Leading German news platform Deutsche Welle has described Malta’s current situation as a “financial tempest”, asking whether a nation of just 450,000 could “pose a threat to global efforts to track money laundering and enforce economic sanctions”.

The analysis made reference to the country’s failure to make progress in addressing concerns from bodies such as the Council of Europe, the European Commission, the European Parliament and the International Monetary Fund regarding money laundering, corruption and financial supervision.

The article included quotes from MEP Ana Gomes who called the country’s tax system “anti-European” and accused it of draining billions in revenue from the other Member States.

This was echoed by Frederik Obermaier, a journalist at Germany’s Süddeutsche Zeitung who described Malta as a financial hub that benefitted from “a veil of secrecy and fear”.

Joining a long list of international organisations, media freedom watch dogs, politicians, human rights organisations, and family members, the article also drew attention to the lack of action on bringing the murderers of Daphne Caruana Galizia to justice.

Following the revelations of the Panama papers, the only action Malta took was to “kill the journalist who was investigating government and friends corruption,” PD MP Marlene Farrugia said.

She said the countries institutions were populated with “government cronies that psychologically beat the rest of the manpower into silence,” referencing the fact that the Prime Minister’s chief of staff Keith Schembri and Tourism Minister Konrad Mizzi both kept their positions of power despite opening secret Panama companies shortly after the 2013 general election win.

This latest criticism of the rule of law and concerns around money laundering by one of Germany’s biggest news sites came on the same day as it was announced the country had failed its first Moneyval anti-money laundering test.

The anti-money laundering and counter financing of terrorism committee, set up by the Council of Europe has the role of assessing a nation’s compliance with international standards.  

Malta failed and the report noted that while laws and measures exist “on paper”, they are not enforced by police and the Malta Financial Services Authority.

The country has until July to push up its final score, or risk being put on a blacklist.

Despite all the observations and reports from specialist committees and highly experienced international watchdogs, the Maltese government continues to deny there is a problem.

Finance Minister Edward Scicluna repeated the line that the Panama Papers are “history” and that attacks on the country are nothing more than premeditated bullying designed to damage Malta.

This line was repeated by MEP Alfred Sant during an embarrassing showdown in European Parliament on Monday. MEPs gathered to debate the rule of law resolution in Malta and Slovakia, prior to a vote that is due to take place on Thursday.

Sant said Malta “fully respects the rule of law” and that the issues raised in the resolution were “factually incorrect” and made up to advance biased interests in national politics.

MEP Miriam Dalli then protested that the resolution ignored the government’s commitment to change, noting that just last week they had implemented one of the Venice Commission’s recommendations.

The government announced that the role of the Attorney General would be split into two new roles- Chief Prosecutor and Attorney General. They argue that this is fulfilling one of the Venice Commission’s recommendations, despite the fact that one of the Commissions biggest criticisms was that the Prime Minister put people into these positions – something that will not change with the creation of these new roles.

Gomes said in European Parliament that the Prime Minister was giving orders to the prosecutor and that “the mafia is manipulating the government”. She also demanded to know what concrete action had been taken by the government in terms of fighting crime, corruption, money laundering and reinstating the rule of law.

She asked Sant and Dalli what they were doing for the rule of law in Malta and the fight against organised crime, considering the government’s track record of no action on the Panama Papers despite two members of the government being exposed.

“Please tell me what you have done about that,” Gomes said.