Why Moneyval’s verdict matters

Moneyval, the anti-money laundering body of the Council of Europe, is entrusted with the task of assessing compliance with the principal international standards to counter money laundering and the financing of terrorism, as well as the effectiveness of their implementation. It also makes recommendations to national authorities in respect of improvements considered necessary to their systems.

Malta’s anti-financial crime processes have been under scrutiny for a few years. The perception that Malta’s favourable tax regime is attracting some operators in financial services and iGaming that are using their local set-ups to launder money is widespread. Illegal trading in oil in war-torn Libya, as well as the sale of arms to terrorists by entities operating in Malta, were other allegations that cast a cloud on the effectiveness of the country’s anti-money laundering processes.

It would be a mistake to brush off these perceptions as unfair speculation by countries that are jealous of Malta’s economic success in the last few years. When the European Banking Association investigated Pilatus Bank, it concluded in no uncertain terms that banking regulation and supervision were not being...