Malta Blacklisted by Global Watchdog Over Financial Corruption Concerns
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FATF Greylists Malta for Insufficient Protections Against Dirty Money
Malta has been added to the Financial Action Task Force’s (FATF) grey list, joining 23 other jurisdictions deemed to have insufficient protections against dirty money. This marks the first time a member of the European Union has been labelled a jurisdiction of concern by the global watchdog.
Reasons for Greylisting
The FATF cited concerns over tax crimes and a lack of transparency in Malta’s financial sector as the primary reasons for its greylisting. Despite Malta’s efforts to avoid being labelled a jurisdiction of concern, the country was unsuccessful in convincing FATF members otherwise.
Consequences for Malta’s Economy
The inclusion on the grey list is expected to make it harder for Malta to attract international banking and investment. Experts warn that this will have significant consequences for the country’s economy, damaging its reputation globally and making it harder to recover from financial setbacks.
Critics Call for Action Against Corruption
Critics of Malta’s financial sector, which has long been accused of being a tax haven due to its low tax rates for foreign companies compared to other EU countries, have called for the government to take action against corruption. The assassination of journalist Daphne Caruana Galizia in 2017 was seen as a turning point in Malta’s handling of financial crime, with many criticizing the government’s lack of action to combat money laundering and tax evasion.
Opportunity for Reforms
Some experts see the decision as an opportunity for Malta to finally take financial crime seriously and implement meaningful reforms. As Jacob Borg, a Maltese journalist who has extensively covered corruption in the country, said: “It’s not unfair. We’ve been ignoring financial crime for years, and now it’s caught up with us. Hopefully, this will be a wake-up call for the government to finally take action.”
Quotes
- Finance Minister Clyde Caruana: “Malta does not deserve to be on the list.”
- Jacob Borg, Maltese journalist: “We’ve been ignoring financial crime for years, and now it’s caught up with us. Hopefully, this will be a wake-up call for the government to finally take action.”
Timeline
- 2016: Panama Papers investigation exposes illicit financial flows and launches tax probes and criminal investigations worldwide.
- 2017: Assassination of journalist Daphne Caruana Galizia highlights Malta’s handling of financial crime.