Issue link: https://maltatoday.uberflip.com/i/1162794
05.09.19 11 INTERVIEW side of Europe. ere were two particular incidents which received exaggerated interna- tional media attention. If you look at what happened in other jurisdictions, our cases were very small and insignifi- cant in the grand scheme of things. But this is by far not a consolation. We have learned from these situations and have had over the last year many detailed discussions with the European Banking Authority (EBA), the ECB and other Eu- ropean international standards setters with whom we have set out which im- provement areas we will be working on. An EBA investigation confirmed that we were not in breach of EU law, but of course, they gave us recommendations on areas where we need to improve. When I speak with my counterparts in Europe, I realise that all of us have the same challenges. ere are no countries which do not have such challenges. It's all about im- proving, capacity-building, having the right resources and the right infra- structure. e reality is that money laundering today – which is the focus of the world when it comes to supervi- sion – is becoming so sophisticated and elaborate that regulators really have to up their game on an ongoing basis and collaborate more. Earlier this year I participated in the City Week conference in London on the future of regulation. One of the things I mentioned was that [...] it is useless pointing fingers at each other. Today I might have an issue, and tomorrow it is you who might face a similar prob- lem. I think we need to work increas- ingly together to at least have a set of common standards which supervisors at the MFSA can apply when it comes to anti-money laundering supervision. ere needs to be better knowledge sharing, and a singular approach setting minimum standards. When the fourth anti-money laundering directive was drawn up, each country implemented it in the way it thought best. Even the institutional arrangements are not the same in every jurisdiction. In Europe there is now talk of having one single financial crime compliance supervisor - a sort of Financial Intelligence Analysis Unit of Europe - and this is precisely be- cause the current system is still allowing bad actors to enter the system. Do you think that the storm which we had experienced around two years ago has subsided and that Malta has basically overcome it? I wouldn't say it has overcome it com- pletely; foreigners read the headlines and I also meet counterparts who men- tion stories they would have read about Malta. ey do so however, more in terms of asking what the situation is lo- cally. When I explain the situation, they tell me that they have had their own fair share of issues. It has, undoubtedly, put us under the spotlight, adding more pressure on us to really up our game and show that we really do our work in good faith. We need to show that we are really investing in improving the regula- tory system and that we mean business when it comes to raising the standards of supervision to the same level of that of other jurisdictions. Malta is a country in which there has been political consensus about the financial services sector since the 1990s, and it appears there is also a political brief that we need to up our game and bring the MFSA not in line with, but above, other regulatory authorities in Europe. However, there is one issue which journalists and players in this industry are always asking about – the fact that Malta has a certain unique tax regime which is tolerated by the EU and has an influence in attracting companies to Malta. What are your views on this? I totally disagree with the tax hav- en label. Malta is not a tax haven, be- cause in tax havens, you don't pay tax. On the contrary, in Malta you do pay tax - VAT, income and all the other taxes, just like the rest of the Maltese residents. I find the tax haven label is incorrect and misleading. Before we joined the EU in 2004, our tax regime was analysed and agreed to by the EU. [...] Malta is very transparent. In fact, I'll mention this point to make it even clearer: when a foreign shareholder gets the six sevenths refund on the 35% tax on dividend, and is a resident in another jurisdiction, he or she needs to declare that income in that jurisdiction. Malta is a signatory to the Organisation for Economic Co-operation and Develop- ment (OECD) agreement and to the Eu- ropean framework of sharing tax infor- mation. We don't have any secrets when it comes to tax; our systems are OECD compliant and transparent. If you were to ask what would happen were we to change our tax regime, I'd say only God knows. If something is going to change [within the EU when it comes to tax], and Malta agrees to it, there should be a long transition period and one would need to see exactly what sort of changes these would be. Personally, I am against tax harmonisation at EU level. If we had to be sincere, there are no clouds on the horizon indicating that [the EU's tax approach] will change in the foreseeable future. No, not at this point in time. There are a number of reforms in your mind, and other reforms have already started. There are also several protocols in place, and you've talked about capacity building, upping the skill game and the internationalisation of staff. You've also talked about opening up to new segments of industry. What are your plans? By the end of 2021/2022 the MFSA will be in a better place. We'll have the right amount and quality of resources, a solid technological platform, and cut- ting-edge business intelligence tools. is will give us more depth and effi- cacy in our oversight activities. Once we achieve that quality level and are in a strong position, we'd like to engage more and strengthen our relationships with other regulators. Institutions like the MFSA can learn a lot from oth- er foreign authorities, and we want to work further on this. My view is that in the next three years we'll carry out the necessary investment and strengthen the Authority, however we will have to be committed to keep improving it on an ongoing basis. e moment you stop improving, you start lagging behind, and this will definitely not happen un- der my watch. better place by 2021'