Malta Battling Financial Action Task Force Greylist

In recent times Malta, home to more than 250 top international betting and iGaming operators, has tried its best to shake off negative labels like “Offshore”, “tax haven” and even “Panama in the EU”.

But now the Mediterranean island is facing the very real threat of an existential financial crisis after being placed on a high-alert greylist by the world’s leading dirty money watchdog.

The Financial Action Task Force (FATF), founded in 1989 to combat global money laundering, drug trafficking and terrorist financing, has decreed that the George Cross Island will be subjected to “enhanced monitoring”.

FATF is recognised by 200 nations and has 39 steering member countries and regional organisations, among them: the USA, the European Commission, UK, Germany, France, Japan, China, Russia and India.

It’s ruling that Malta has potentially serious issues with money laundering is a major blow to those fighting hard to clear and clean the country’s badly dented image after the assassination of Maltese anti-corruption journalist Daphne Anne Caruana Galizia, who was blown up by a car bomb in October 2017.

Malta Labour Party Prime Minister Robert Abela and Finance Minister Clyde Aruana have not yet publicly addressed the crisis; although it is reported that senior government officials are urgently lobbying international partners to overturn the negative designation.

Bernard Grech, leader of the opposition Nationalist Party, has labelled the FATF decision as a “punishment for all the nation”.

And he has urged the government to set up a unity task force to counter the damage. 

Akin to major money markets everywhere, such as London, New York, Paris, et al, experts concur it is near impossible to totally exclude nefarious financial transactions. Little Malta, population 440,000, is no exception.

With a corporate tax rate of only five per cent, the island has attracted a host of multinationals and gaming firms, among them Betsson, Tipico, Betfair, Kindred, Flutter, PokerStars, bet365, Evolution and Gamesys.

And in the process, it has provoked the ire–even jealousy–of fellow EU members. 

The powerful block of Green MEPs in the European Parliament recently reported that Malta had helped multinationals “avoid” paying €14bn (£12bn;$15.6bn) in taxes between 2012 and 2015, which would have gone to other EU countries.

Perhaps it is this–as much as allegations of money laundering for the Italian Mafia and Russian oligarchs–that is behind the current squeeze on the island’s financial system.

Malta is now poised to join Albania, Zimbabwe, Syria, Yemen and Myanmar, among 19 countries, on the FATF greylist of shame.

All is not lost, however.

Like Iceland, which was greylisted in 2019, it could get its financial house in order and bounce back to official respectability in a year — unless it wants to join international pariahs North Korea and Iran on the blacklist.