When Malta made international headlines for all the wrong reasons

Aqra dan l-artiklu bil-Malti.

The year that has just ended saw no shortage of scandals making local headlines, but what about in the international media? Malta received plenty of negative attention for its controversial iGaming industry, crypto sector, money laundering, links to criminal activities, high levels of corruption, flailing media freedom, and a raft of EU law infringements. The Shift lists some of the cases in the hope that 2024 will be a better year.

Here is a non-exhaustive list of times Malta was in international news for all the wrong reasons in a single year.

Malta spyware lobbying

In December 2023, Malta was called out as one of seven European Union member states lobbying for the inclusion of a provision in the European Media Freedom Act (EMFA) that would allow spyware to be used against journalists.

According to an expose by Investigate Europe and documents seen by The Shift, Malta, along with Greece, France, Italy, Cyprus, Italy, Sweden, and France, demanded that spyware be allowed under a vague national security provision.

There was outrage from all international media freedom organisations that were quick to condemn the countries, notably Malta, considering its track record and the still-unsolved assassination of Daphne Caruana Galizia.

But the cherry on the cake was Edward Montebello, chief government spokesperson, trying to pressure The Shift into changing the article and its contents. He accused The Shift of “fabrications” and “misinterpretations” but then refused to deny the contents of the official document on the record or provide details of Malta’s stance. Ultimately, the draft text was approved without the draconian measure.

A raft of new infringement measures

In February 2023, Malta was slapped with five European Union infringement measures related to deficiencies in the protection of the marine environment, a failure to finalise water management plans, the derogation for the spring hunting of turtle doves, a total ban on legal services advertising, and a failure to implement laws fighting child sex abuse correctly.

Then, in December, it was hit with another for failing to transpose the Seasonal Workers Directive correctly, which was supposed to improve fair and transparent rules for admitting third-country seasonal workers into the EU. It also provides better working and living conditions for such workers and equal rights and protection from exploitation.

But Malta did not implement it and instead is grappling with significant numbers of non-EU nationals working through unregulated “temping” agencies and facing labour exploitation, being forced to pay exorbitant fees, and living in substandard living conditions such as with more than five or even ten people to one room.

Malta has two months to put it right, or they face possible Court of Justice proceedings. The country currently has some 60 infringement proceedings open against it.

Violating migrants’ human rights

Malta’s name ended up in the media several times throughout the year about illegal pushbacks and other actions that led to people dying or being returned to unsafe countries after trying to cross the Mediterranean Sea.

In early December, Médecins sans frontières documented numerous cases in 2022 and 2023 where Malta failed in its legal responsibilities to rescue or provide assistance to those at risk of drowning. They said this created a situation where, on average, eight people die every day in the region.

In July, Malta was mentioned in the European Parliament by a human rights committee that wanted answers on why the EU is funding crimes against humanity about money sent to Libya. They fear the EU is simply funding pushbacks to torture in Libya, a practice in which Malta is heavily complicit, and are demanding a review of EU migration-related funding and an explanation of activities carried out in Libya in the past years.

The call came hot off the back of a UN report which found Malta was involved in returning some of the 3,000 migrants, including women and children, back to Libya in just the first two months of 2023. The report said that many migrants disembarked at Libyan ports and ended up in detention centres where they were subject to ill-treatment, sexual violence, torture, extortion and prolonged arbitrary detention.

Then, in September, Malta hosted southern European countries in Malta to talk about migration, but not surprisingly, it left its involvement in such horrific atrocities and illegalities off the agenda.

Courting corruption

2023 was the year Malta was confirmed by Transparency International as being the most corrupt it has ever been. It scored just 51 out of a possible 100, falling three points in a year and scoring the same as Saudi Arabia and Rwanda. It was also far below the European Union average of 66.

In October, in the European Parliament, MEPs were horrified at Prime Minister Robert Abela’s attempt to play down accusations of corruption and called for action. A parliament resolution addressed scandals which “make it evidence serious governance issues in Malta persist”.

The resolution also described Abela’s indifference as “an invitation to anarchy” and “continue to entrench the culture of impunity for public officials allegedly embroiled in scandals”. MEPs referred to the driving licence racket, the vote-buying scandal through a social benefits scheme, and impunity given to disgraced former prime minister Joseph Muscat, his ex-chief of staff Keith Schembri, and former minister Konrad Mizzi.

A joint investigation by The Shift with local media and the OCCRP also shed light on how contractor Vitals Global Healthcare (VGH) sent at least €21 million to its parent company Bluestone Investments, which spent over a million euro on jewellery, private school fees, high-end travel, five-star hotels, and luxury cars as well as transferring large sums to individuals connected to VGH. Meanwhile, Muscat is under investigation over payments he received linked to the deal.

Again, in terms of corruption, this list is far from exhaustive.

Money laundering fails

Despite being taken off the Financial Action Task Force (FATF) greylist in 2022 – a list it ended up on due to failures to address money laundering at an institutional level, 2023 saw no end of financial crime scandals.

In September, cryptocurrency boss Faruk Fatih Ozer was sentenced to 11,196 years in Turkish prison for a $2 billion fraud involving his crypto site Thodex. After defrauding some 40,000 people, he fled to Albania, where he was eventually arrested, but he also stashed some $13 million of his ill-gotten gains in Malta, according to judicial documents.

Then, in November, Changpeng Zhao, the CEO of Binance, once based in Malta to take advantage of its lax crypto laws, pleaded guilty to money laundering offences, stepped down, and paid a multi-billion dollar fine to US authorities.

Binance, based out of Malta for 18 months while not paying a single cent in tax, is accused of operating as an unregistered securities exchange, violating US securities laws, and failing to meet anti-money laundering obligations, amongst other offences- including those that were likely to have been committed during its time in Malta.

2023 also saw Bittrex, a once Malta-based crypto exchange, investigated by the US Securities and Exchange Commission (SEC), Justin Sun, creator of TRX, and Christopher Emms from Green Goblin. Despite this and the exodus of most crypto companies since the rules tightened, the government insists Malta is a “pioneer”.

Mafia Malta

In January 2023, a study commissioned by the European Parliament concluded Malta was the Mafia’s El Dorado as Italian mafia clans laundered billions of euro through the iGaming sector between 2015 and 2022.

Then, a group of 56 mafiosi were arrested in Italy, and hundreds of millions of euro were seized. The well-organised criminal syndicate was also running a complex system of trafficking vehicles stolen in Italy, intended for buyers abroad, mainly in Malta and Romania, the authorities said.

Shortly after, the Global Organised Crime Index found Malta a haven for financial crime due to a weak judiciary, state, and police. It also found it was a destination and transit country for human trafficking, drugs and even weapons, facilitated by state capture and the way high-level officials conceal their connections with organised crime. However, regarding the type of criminal actors, state-embedded actors were ranked as the riskiest, followed by criminal networks and private sector actors.

In April, a report from Italy’s anti-mafia unit (DIA) for the first six months of the year detailed how mafia activity has been “migrating” to Malta due to the ease of evading customs controls and its EU membership and proximity to Italy. The DIA said Malta’s favourable tax regime and ease-of-business regulations “allow the various clans to carry out profitable money laundering activities.”

In  May, an Italian court seized €3 million in assets against two suspected mafia members who also had gambling operations in Malta. Around the same time, a Malta-based company was found to be selling encrypted phones and secure messaging applications to the Italian Ndrangheta since 2016.

This list of examples is not exhaustive; there are likely countless other instances. Meanwhile, the government pays little attention to the issue and rarely comments publicly on its actions to combat it.

iGaming blues

In June, Glitnor, Malta-headquartered Tipwin was fined in Denmark in September for breaking anti-money laundering regulations. It was ordered to pay some €13,400 after Denmark’s Gambling Authority reported it to local police for two breaches of local gaming laws.

In November, Videoslots, also based in Malta, was fined €760,000 for serious AML failures described as “serious and systematic”.

This is aside from multiple local fines for gross violations of compliance and AML laws, including Glitnor, Casino Malta, Casumo Services Limited, CS Litto Limited, and the director of an unnamed Malta-based iGaming company, Andrew Martin Jones.

Media freedom

2023 saw no shortage of calls from the international community for Malta to step up its protection for journalists.

In March, international media advocacy groups asked the prime minister to follow up on the public consultation for media reform and to ensure it goes beyond a “box-ticking exercise.”

In September, a coalition of organisations called for the government to publish its elusive report by the Committee appointed for media reform, despite it being ready. In October, Council of Europe Commissioner for Human Rights Dunja Mijatovic wrote to Abela expressing concern about the failure to implement recommendations from the public inquiry into the assassination of Daphne Caruana Galizia and the situation regarding freedom of expression in the country.

Also in October, organisations called for Maltese authorities to bring to justice all those responsible for her killing and to implement in full the recommendations of the public inquiry into her assassination. In the same month, European Parliament called on the government to do more to protect journalists.

This came after Malta dropped six places in the Reporters Without Borders World Press Freedom Index, ranking 84th out of 180 countries – an all-time low.