Money laundering claims on Pilatus Bank ‘not far fetched’

This week MEP David Casa presented further evidence of Pilatus Bank’s Anti-Money Laundering (AML) violations to the ECB.

In his letter to Supervisory Board Chair Danièle Nouy, the Maltese MEP claimed that his conclusion from the information he received was that Pilatus Bank was not merely flouting Anti-Money Laundering laws but that it has been set-up specifically for that purpose.

An expert in the field of AML that spoke to The Shift on condition of anonymity said: “Irrespective of what new evidence has come into Casa’s possession the information that is already in the public domain makes the conclusions he has come to not far fetched”.

The AML expert referred to the following information that is already in the public domain:

• Pilatus Bank was used to transfer funds on a number of occasions that were proceeds of crime. This is clear from the leaked FIAU reports;
• Pilatus Bank never sent any Suspicious Transaction Reports, that we know of, as they were legally obliged to do on the basis of those transactions;
• The bank’s owners also have dubious track records, in the leaked FIAU Report on former Allied Newspapers director Adrian Hillman the FIAU was evidently aware that the bank’s chairman was being investigated for AML-related violations in another jurisdiction;
• The bank’s clients are Azeri Politically Exposed Persons who reportedly transferred large amounts of money with no justification and no due diligence on the source of funds being carried out (leaked FIAU compliance report);
• The compliance report following the on-site inspection into the bank had described the bank’s AML violations as ‘glaring and deliberate’

Speaking to The Shift News, David Casa said, “It is becoming increasingly difficult to claim that Malta has a legitimate taxation system grounded by a robust regulatory and supervisory framework when you have this kind of organisation continuing to operate in Malta with impunity. Pilatus Bank should not hold a licence in Malta, and the longer it does the more damage is done.”

In November, Casa, called on the European Central Bank (ECB) to assume direct supervision of Pilatus Bank and proceed to suspend and withdraw its authorisation to operate.

Underlining the evidence that emerged from three investigations held by Malta’s anti-money laundering agency, FIAU, in connection with the private bank’s involvement in the laundering of illicit funds for Azerbaijani and Maltese PEPs, Casa told the ECB that investigations found evidence that Pilatus Bank was set up for the express purpose of laundering money for the Azerbaijani ruling family and senior Maltese government officials.

Maltese MEPs are facing a Herculean task in defending Malta’s tax regime. Last month Malta narrowly avoided being labelled a tax haven. According to a report by Oxfam, Ireland, Luxembourg, the Netherlands and Malta should have been labelled as tax havens by the EU.

The European Parliament adopted in plenary the final report and the recommendations of the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) which accused Member States of serious failures in combating money laundering, tax avoidance and tax evasion.

MEPs called on the European Commission and the Member States to amend legislation, take new initiatives for greater transparency and enforce existing legislation with Green MEP Sven Giegold saying “EU countries have covered criminal transactions and in many cases violated EU law. Governments must be brought to justice, their laws must finally be made watertight and the non-transparent practices of money laundering and tax avoidance must be stopped.”