Issue link: https://maltatoday.uberflip.com/i/1237083
10 maltatoday | SUNDAY • 19 APRIL 2020 CORONAVIRUS CRISIS MASSIMO COSTA THE start of 2020 was a high point for a select handful of Maltese restaurants, when three eateries reached the peak of cu- linary excellence unprecedented in the local scene. In February, three restaurants – Under Grain, De Mondion and Noni – became the first Maltese fine dining establishments to be awarded a Michelin Star, long considered the highest and most prestigious honour in the indus- try. Another three, Terrone, Com- mando and Rubino, were award- ed Michelin's Bib Gourmand. Two weeks later however, all of Malta would witness a ma- jor upheaval in response to the outbreak of the coronavirus that swept the globe. Just ten days after the first case reported on 7 March, the gov- ernment ordered all restaurants to close their doors as it upped preventive measures: right as the restaurants had finally seen their hard work translate into a Michelin Star, their operation ground to a halt. "It has been nothing but un- fortunate for the entire team," said Under Grain's executive chef Victor Borg, speaking of the bitter-sweet reality of how their 'Michelin year' was brought to an abrupt stop. "After just three weeks of winning a prestigious Michelin Star, we had to close our doors to the public… but the quiet time will not go to waste. We are using this time to re- think and come back better than ever before." Borg remains optimistic that Under Grain's doors will reopen for hungry guests wanting their Michelin stars come as pandemic shuts Malta's great Michelin year was killed just weeks after three restaurants won the island's first ever stars. Under Grain's chef and director still think their glass is half full MATTHEW AGIUS THE global money laun- dering and terrorist financ- ing watchdog, the Financial Action Task Force (FATF), is warning that criminals are taking advantage of the COVID-19 pandemic to car- ry out financial fraud and ex- ploitation scams, including advertising and trafficking in counterfeit medicines, of- fering fraudulent investment opportunities, and engaging in phishing schemes that prey on virus-related fears. Malicious or fraudulent cy- bercrimes, fundraising for fake charities, and various medical scams targeting in- nocent victims are likely to increase, with criminals at- tempting to profit from the pandemic by exploiting peo- ple in urgent need of care and the goodwill of the general public and spreading misin- formation about COVID-19. Even national authorities are alerting citizens and busi- nesses to the scams, mainly impostor, investment and product scams and even in- sider trading in relation to COVID-19. The Danske Bank scandal is ever a cautionary tale for the world of banking and finance, but more so in times of eco- nomic depression and uncer- tainty such as that brought about by the COVID-19 pan- demic. From being one of the most respected European financial institutions, Danske Bank went to being implicated in what may be the world's largest money laundering scandal, with $236 billion in laundered money estimated to have passed through its Es- tonian branch. "In a nutshell, what hap- pened is this," lawyer Charles Cassar, founder of Shoulder Compliance, says. "Just be- fore the financial crisis of 2008, Danske Bank had ac- quired Sampo Bank, a Bank which was active in Russia and the Baltics, including Es- tonia. When the 2008 finan- cial crisis hit, banking profits decreased world-wide, but Danske's newly acquired Es- tonian business continued to do well. This was largely due to their 'non-resident' portfo- lio of clients, that is their han- dling of foreign money. "Eventually it turned out that they were laundering money for Russian criminals on a grand scale. However the activity went on unabated for many years. The suggestion of course is that there could have been reluctance to en- force robust controls, since this business was profitable while other parts of the Bank were taking a hit." Now Cassar observes that a striking aspect of some of the larger money laundering cas- es in recent years is how they often directly or indirectly owed their origin to the 2008 crash, as troubled institutions relaxed standards to salvage what business they could, on- ly to end up paying a greater price further down the line. "As the economy takes a hit from COVID-19 business- es would be well advised to remain cautious, since the situation offers perfect op- portunities for launderers, fraudsters and financial crim- inals of all types," the lawyer says. Another lawyer, Integ- ritas head of legal Cheryl Grech, says due diligence is an ever-growing priority for companies, financial ser- vice providers and individu- al practitioners who want to stay afloat by avoiding finan- cial crime ever hitting their business. "I agree that the increase of such crime may be true dur- ing a crisis such as that which we are experiencing. Many businesses are facing loss of income, and so there might be a tendency to let their guard down in the hope that there might be new business on the horizon. Fraudsters might take this opportunity to prey on more vulnerable people in society such as elderly and use this opportunity to make criminal gain," Grech warns. Even Interpol has made an appeal to the public to ex- ercise caution when buying medical supplies online dur- ing the current health crisis, saying criminals are capitaliz- ing on the situation to run a range of financial scams. With surgical masks and other medical supplies in high demand yet difficult to find in retail stores as a result of the COVID-19 pandemic, fake shops, websites, social media accounts and email addresses claiming to sell these items have mushroomed online. But instead of receiving the promised masks and supplies, the unsuspecting victims have seen their money dis- appear into the hands of the criminals involved. "It is important to look out for the obvious signs and if something looks too good to be true it probably is. The in- dustry, especially the financial services one, needs to contin- ue to be alert and not be afraid to ask questions to clients or potential clients in order to understand the structure of their companies and rationale behind their choices to set up such," Grech says. The FATF says that even in this era of social distancing, companies must be ready to carry out proper due diligence through digital onboarding and simplified due diligence and contactless payments. The International Monetary Fund has already flagged the effectiveness of anti-mon- ey laundering and terrorism financing regime Malta's main challenge in the medi- um-term. The Financial In- telligence Analysis Unit, in coordination with the MFSA, have developed a risk-based automated tool to identify risk areas, but the IMF wants more frequent and more in- trusive supervisory inspec- tions of banks and cryptocur- rency traders. Perhaps even more in the time a pandemic, the IMF's warning that the MFSA re- mains strained due to the large number of financial in- stitutions under supervision, heightens the need stronger oversight and swifter police action on money laundering, prosecutions and related as- set confiscations. magius@mediatoday.com.mt White-collar crime can pay under cover of COVID-19