Issue link: https://maltatoday.uberflip.com/i/1386209
4 maltatoday | WEDNESDAY • 23 JUNE 2021 NEWS GREY is the colour Malta will want to avoid later on today as the Financial Action Task Force decides the country's fate. Malta risks being placed on the interna- tional grey list of jurisdictions that require enhanced monitoring of their anti-money laundering. This is one list the country would want to avoid because of the potential impact this could have on the financial services sector. Government, its regulatory institutions and financial services practitioners believe it would be unfair for Malta to be placed on the grey list, given that it passed the techni- cal compliance test undertaken by Money- val, a Council of Europe body. A daunting task But the fear among senior government sources and others within the regulatory re- gimes is that the final decision will be "polit- ical" and not of a technical nature. FATF has 37 member states and two insti- tutions that will vote on the recommenda- tion put forward by the secretariat. The result is not decided by a simple ma- jority and any three member states can block the vote. This is why Malta faces a daunting task. Sources have indicated that Germany, which also holds the presidency of the FATF, the UK and the US want Malta on the grey list and that will be enough to sway the vote, irrespective of whether the rest vote against. Being on the grey list is not the end of the world but the country will find that things will suddenly become more complicated on the international stage. Financial services, banking and the gam- ing sectors will be the ones to face the brunt of enhanced international scrutiny and due diligence. Economic recovery after COVID-19 may become more complex than previously thought, as a result. Within this context, FATF's decision may also have political ramifications that cannot be underestimated. A problematic inheritance For the past 18 months, Robert Abela's government has been on a reformist spree to clean up the mess his predecessor left in the field of money laundering. People close to power like Konrad Miz- zi and Keith Schembri, who escaped un- scathed from the Panama Papers scandal in 2016, were pushed away with a barge pole. Schembri has also been charged, along with several others, including accountants Brian Tonna and Karl Cini, with money laundering, fraud and corruption. The police were given a new lease of life with the appointment of Angelo Gafa as commissioner and regulators like the Malta Financial Services Authority and the Finan- cial Intelligence Analysis Unit have been beefed up. Prosecutions for money laundering have also increased. Abela may pride himself in turning around a very problematic inheritance into an opportunity to do things right. But failure to remain off the grey list and its impact on certain economic sectors may require the Prime Minister to look beyond the legalese. The Prime Minister may try to slate the Opposition by accusing them of not putting the national interest at heart in the face of international pressure. He may also try and stamp his feet within the EU – a move that will earn him brownie points in Malta but which may alienate European allies. Abela may also feel empowered to ask for higher standards from his own MPs and ministers. The grey list and the election: Abela's choices While Malta awaits its fate at the Financial Action Task Force assembly, Kurt Sansone ponders the political options Robert Abela may face if grey-listing becomes a reality Failure to remain off the grey list and its impact on certain economic sectors may require Prime Minister Robert Abela to look beyond the legalese