Issue link: https://maltatoday.uberflip.com/i/1377667
8 OPINION 27.5.2021 D eputy prime minister Chris Fearne said people who are fully vaccinat- ed will not have to wear a mask outdoors starting from 1 July. It was the cherry on the cake for islanders who this week drew a line in the sand reaching 'herd immunity' against COVID-19 - in simple terms it means 70% of adult popu- lation have been vaccinated. We also have our own home-grown feel-good factor as positive leaks from the Moneyval final inspection report to the Council of Europe's experts recog- nises that sufficient institutional reforms have been enacted during the Robert Abela's administration. e fnancial services industry now faces a challenge to persuade potential investors that the reform was real and heads did roll at top regulator bodies in a root and branch reform. In an inter- view, the chairman of FinanceMaltasaid he was eager to get on the first available flight to spread the good news that Mal- ta is open for financial services business as soon as the inconveniences caused by the pandemic are behind us. is may be an honest wish, since during the past year marking his appointment, there was nothing he could do to prime the pump. Back on the subject of the damage im- pinged on the domicile mostly resulting from court testimonials by suspects in connection with the murder (three years ago) of an outspoken journalist - Daph- ne Caruana Galizia. is is palpable. As they say - it does not rain, it pours. A scandal of international scale con- cerns the use of shell companies in Mal- ta to shield dubious billionaires in their drive to avail themselves of the favoura- ble tax regime. A particular case involves an African princess of the dos Santos dy- nasty in a scheme valued at $2.2 billion by Forbes. More scandals reek in our cupboard and nobody can forget the forced closure of three local banks. ese were private banks - Nemea, Satabank and an Irani- an owned bank - Pilatus. And we can- not forget the reprimand on the Bank of Valetta by the ECB over AML and gov- ernance issues. ese issues sent shock waves since BOV is a major bank with a majority shareholding held by the state. For many years, it was run by a chairman appointed by the major shareholder. One was the ex-managing director of RSM - the firm auditing Labour Party currently replaced by a well-connected economist in government circles. More sad news is the fine of €340,058 imposed on Lombard Bank by e Financial Intelligence Analysis Unit (FIAU). It proclaimed the bank breached five separate anti-money laundering provisions. It reported that in one case the bank failed to properly ascertain the source of funds of a politically exposed client. e inadequate information held on file about the origin of wealth of three other clients convinced the FIAU that it needed to penalise Lombard on in- adequate enforcement of anti-financial crime directives. Lombard informed its stakeholders that it has always been and remains committed to preventing finan- cial crime contemplated by its clients and strongly appealed the fine. e Malta Financial Services Author- ity (MFSA) launched enforcement pro- ceedings against four licensed operators last year, levying fines of €15,000 each on two entities and stripping the other two of their licenses. e sudden resig- nation of the MFSA CEO appointed only 20 months ago - caused by a scandal of his accepting a free holiday to Las Vegas from Yorgen Fenech - seemed to break the camel's back. e police arrested Yorgen Fenech, owner of 17 Black and one of the richest individuals in Malta, accusing him of be- ing the mastermind behind the murder of a journalist. All these factors have taken their toll on public opinion while we are still feeling the cold blast of daily financial scandals. e floodgates were busted with nega- tive publicity following the disclosure of two secret Panama companies in 2015 registered by audit firm Nexia BT (rep- resenting a disgraced Panamanian firm - Monaco Fonseca) commissioned for top members of cabinet. But it is not all doom and gloom. A contrite country with a passion to re- turn to normality needs to look ahead; all stakeholders, including the govern- ment, national authorities and market operators must put good governance at the top of their agenda and continue enhancing internal controls to strength- en the fight against money laundering and terrorism funding. During the past years, the country has witnessed several protests sparked by damning revelations disclosed in the independent media. Moving on, one notes how Abigail Mamo, CEO of Malta's Chamber of Small and Medium Enteprises said that the chamber received calls from restau- rants, retailers, grocers complaining of reduced business and urged the govern- ment to issue a second round of free cash vouchers to the public - these are target- ed for the first week of June. Back to the theme regarding the repu- tation of Malta's financial services sector this can only be regained through hard work and patience. Trust is a plant of slow growth. ank our stars, that Mon- eyval's dreaded grey-listing will never materialise. Malta will have its work cut out to convince the international community that we do not only enact good laws to prevent financial crime but also actually implement these laws with a steely de- termination. is possibly being an election year, the nation is being fed daily snippets of a feel-good factor and this coincides with the full opening of bars and restaurants this week - with bathers at beaches no longer needing to wear face masks. e floodgates for new travellers will open next month with an expectation of about one million visitors churned by crafty cash handouts on offer by MTA to exac- erbate the flow of tourists. In truth, businesses who applied for bridging finance from banks at prefer- ential terms have somewhat been able to mitigate their dire situation. ese are now making some profits, even if not so much. e truth is, the pandemic - like the dodo - may disappear by this time next year with the help of booster vaccines and when it does, all industries that sharpened their knives during the slow- down will thrive. ese can exploit fresh opportunities by reaping benefits gener- ated out of pent-up demand from clients. Some of the zombies will perish and face bankruptcies. Our redemption can triumph, if we sustain a root and branch reform backed by checks and balances in a concerted drive to strengthen the three pillars of good governance, the rule of law and de- mocracy. Herd immunity is a precursor to normality George Mangion George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island