50 shades of greylisting

As the FATF D-Day approaches, the political exchanges on the matter have gone up a notch or two. This Wednesday, a plenary vote of FATF members will determine the future of the country’s economy – and that is no light statement.

It is difficult for such matters of international political and economic complexity to trickle down to the public at large. In fact, the level of discourse will often warrant a translation into the tribal vernacular for facile local consumption.

Few have really grasped what the Financial Action Task Force (FATF) is about and why this potential greylisting is such a big deal for the nation. We are talking about global action against money laundering and terrorist financing.

The FATF ensures that nations across the globe do not have weak systems in the fight against money laundering and terrorist financing. When a state is deemed to have such a weak system (a strategically deficient system) it is placed under increased monitoring. This is what greylisting is.

The problem with greylisting is not so much the type of company Malta would enjoy in the list of international miscreant nations but rather the knock-out blow that would be delivered to crucial sectors of the economy. Forget the ridiculously hyperbolic and propagandistic aspirations of becoming “the best in the world”, greylisting would see Malta’s financial sector (and other sectors with a domino effect) suffer huge reputational damage.

In simple terms, a FATF greylisting is the equivalent of a huge sign being placed on Malta stating “WARNING: THIS COUNTRY DOES NOT TREAT MAJOR FINANCIAL CRIME SERIOUSLY AND IS NOT TRUSTWORTHY.” (Apologies for the CAPS but some things need saying out loud). It may be worth adding that the process of listing and monitoring is a continuous one and not one that was invented overnight.

With that information in mind, we can now look at what is going on in Malta in the run-up to Wednesday’s vote. The government has known for a long time the stakes that are at play here. It is also fully aware that much of the responsibility for the systemic weakening boils down to the politics of Joseph Muscat’s ‘Tagħna Lkoll’ movement as inherited and defended by the current set.

It is not as though the backsliding of the rule of law, institutional deterioration and multiple scandals involving lack of transparency, inexistent meritocracy and corruption came into existence by the allegations of the few who dared point fingers from the start. The road to Wednesday’s plenary was paved with seven years of irresponsible governing.

The greylisting of our system would only be the culminating rubber stamp confirming the achievements (in the negative) of a sick political system. That is what our starting point of appreciation should be.

Outside the political arena of mud-slinging demagoguery, there is an objective appreciation to be made. That appreciation involves an understanding that the FATF vote on Wednesday would be an indictment of a whole system and modus operandi.

Our government will tell you that it has recently invested in multiple reforms that were even pleasing to the Moneyval evaluation. What they do not tell you is why those reforms were necessary. Why the government of disgraced politicians Muscat, Konrad Mizzi and Keith Schembri with Robert Abela as advisor had allowed a poisoned environment to develop where the laws and practices became subservient to the shady, the corrupt and the downright criminal.

Abela’s government has been in panic mode trying to patch up at least the written legislative framework to render the Maltese system vaguely presentable as these tests arrived. We are regaled with the Orban-like rhetoric of Minister Clyde Caruana who would have us believe that this is an international conspiracy by those who are somehow jealous of the Maltese success story. Behind the scenes though lies a well-concealed awareness and sense of guilt in a cabinet made up of those who for too long were prepared to shut their eyes to the truth.

This is also not about the toothless Nationalist Party and its last-minute attempts to try to seem relevant at this juncture. The “traitors” oratory employed at this stage by Labour is little more than a deviation. It fits with the spin that the whole world is out to get Malta and its supposed success story. Such rhetoric plays in Labour’s favour because in popular terms even a negative outcome next Wednesday can be blamed on others.

The public will not immediately feel the effects of a greylisting and Abela’s labour will faff its way through another electoral victory. Whether the 50 shades of grey it is painting will be enough to survive the potential tsunami of negative effects on the island is another story.

                           
                               
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saviour mamo
saviour mamo
4 months ago

Moneyval should understand that the more things change in this country, the more they stay the same.
Has anything changed that makes former minister Konrad Mizzi and others face justice?
By the way, where is the Police Commissioner. Is he in hibernation?

viv
viv
4 months ago

When the party hangover begins to kick in, the choice is whether to hit the gym and sweat the toxins out – the corrupt have to go; or the ‘hair of the dog’ – and have an unpleasant and numbing swig at yesterday’s bottle.

Godfrey Leone Ganado
Godfrey Leone Ganado
4 months ago

Excellent article, unfortunately not for the majority who are uninformed or misinformed, and who would accept a bag of shit to arm themselves with the justification mantras you mentioned, to defend their idols of whatever colour, against their informed ‘traitors’ who sadly see our country sliding into the economic disaster which would first swallow the same army which shouts ‘crucify them’.
I have been working in the financial services sector for over 50 years, and while I agree that our professional class has not always ticked all the boxes of compliance, there always were the unwritten foundations of ensuring the continuous best possible protection for Malta’s reputation and attractiveness of foreign direct investment – integrity and adoption of high personal and Institutional professional standards of independence and law enforcement by the forces of order and the judiciary.
Unfortunately, integrity, professional standards and enforcement are now bartered with money, wealth and frivoulous living, by the followes of Judas, at the expense of the mammoth Barabbas crowd.

KD Far
KD Far
4 months ago

L-ebda Gvern ma qabillu jirranga l-Ligijiet biex ihalli lil niesu jghaffgu kemm jifilhu. ‘Unwritten foundations’ ma jiswewx karlin.

Henry s Pace
Henry s Pace
4 months ago

‘ Abela’s government has been in panic mode trying to patch up at least the written legislative framework to render the Maltese system vaguely presentable ‘
Its all just on paper in practice it is all negligible .

Malcolm Sammut
Malcolm Sammut
4 months ago

Abela’s labour will faff its way through another electoral victory.”

That’s true but after that, they have to try and govern and make the ‘best in the world’ come true

KD Far
KD Far
4 months ago

Can your “WARNING: THIS COUNTRY DOES NOT TREAT MAJOR FINANCIAL CRIME SERIOUSLY AND IS NOT TRUSTWORTHY.”, be something of more pro business to Malta?

Seeing Panama, the BVI and others all enjoy the top financial services worldwide when they cannot be corrupt any more than they already are, may also imply that some business may find Malta attractive.

Remember the top technology at our Freeport which is catching more illicit substances from passing through Malta? It resulted in Maersk not passing any more our ports.

The truth is that all countries are corrupt in some form or another. If Malta is FTAF greylisted it means that other countries are working against us as if we should be greylisted, the same should be for a number of other EU countries that have a worse non compliancy with the FATF list.

adriang
adriang
4 months ago
Reply to  KD Far

Maersk not passing through our ports has absolutely nothing to do with the top tech at Freeport. As far as I know they bought and prefer the port they bough in Morocco, and the facilities they have in Spain (Algeciras). Maersk are a US company, and the tech is largely American. What on earth are you talking about? And with regards to the capital letter, you’ve got very narrow vision indeed if you think that an article published in our country has any bearing at all over foreign investors risking their money here. It’s all about trust and risk – our government cannot be trusted, and our country would be deemed high risk.

James
James
4 months ago
Reply to  adriang

If you check you will find that Maersk is actually a Danish company..however again the reality is that ever since the Panama and Paradise Papers were released the rest of the world was aware of the links of corruption in Malta. More evidence was brought to the attention of the world’s media in the Luanda Leaks with the same names in Malta written bold and clear. Other jurisdictions took firm and decisive action, but as the Moneyval Rapporteur says … still not a single successful prosecution in Malta. You cannot dispute the facts but Malta does!

Mark Sant
Mark Sant
4 months ago

Wednesday’s plenary was paved with seven years of irresponsible governing.” This has been said time and again by financial services practitioners. The following five years shall be the price we Maltese shall pay for allowing Joseph Muscat and his cronies to systematically dismantle Malta’s institutions.

Action came, a bit too little, too late and all at one go. If you would like to have an image of the financial sector in Malta today, picture a university law student, who attended 5 lectures a week because that is what was made available by the university. Now picture that same student trying to cram in 15 lectures a day, 5 days a week in his/her last year of the law course to make up for the lectures that were not held during the previous 6 years. In addition to this, the law student is assessed by his/her lecturers every month to make up for the assessments that should have been carried out during the first 6 years of the course. I think you get the picture.

Gee Mike
Gee Mike
4 months ago

The typical disaster cycle, I wish we could give them the finger and let them enjoy the mess they created, unfortunately it is our country too.

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