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8 maltatoday | WEDNESDAY • 30 JUNE 2021 NEWS ANALYSIS WHILE there are technical rea- sons for Malta's greylisting by the Financial Action Task Force, it was the political assassi- nation of Daphne Caruana Galizia and the rot ex- posed in the Panama Pa- pers that put the spotlight on Malta's long-standing problems, most of which predate 2013 but aggra- vated by Joseph Muscat's vocation to piracy in a bid to short-circuit the road to un- precedented economic growth. As things stand, his successor Robert Abela finds it more con- venient to focus on the techno- cratic issues raised by FATF to avoid questions on the political factors which triggered the as- sessment. But the Nationalist opposition's competence in ad- dressing issues raised by FATF will also be under greater scru- tiny, further exposing the la- cunas on its front bench – es- pecially in the economy and financial portfolios. Abela's strategy: Defuse ten- sions and don't poison the well What's sure is that Abela has been wise enough to defuse any escalation with key players, in a sign of political maturity and awareness that lashing out at the FATF at home will be read by international circles as an act of bad faith in pending ne- gotiation. He can't afford to poison the well Malta has to drink from. Yet one can't note the con- trast between his sobriety, and the nationalistic social media outbursts of supporters who go as far blaming the jealousy of larger countries for Malta's current plight. Instead of stamping their feet in protest at what they still see as an "unfair" decision, Prime Minister Robert Abela and Fi- nance Minister Clyde Carua- na have chosen sobriety and technocracy, that of defusing situation by framing the FATF grey isting debacle as an oppor- tunity to gain "certification" for Malta's financial and fiscal sys- tem by addressing long stand- ing problems. On Sunday, Robert Abela summed up the new course by describing Malta's greylisting by FATF as an opportunity to carry out changes which will make Malta an even more at- tractive jurisdiction. "The mo- ment we have the certificate of approval on our anti-mon- ey laundering systems, it will make us an even more attrac- tive jurisdiction," Abela said while being interviewed on party radio station ONE Radio. And while this sobriety is welcome, it has become unsus- tainable to reconcile his claims of Malta being "the best in the world" with the reality of being greylisted. The current mood has practically robbed Abela out of his arsenal of buzzwords. One can no longer speak of "continuity" when what FATF is demanding is discontinuity, and surely one can't turn bad news into good news without sounding ridiculous, as Abe- la risks when downplaying the greylisting as some sort of op- portunity. Complimenting the PM's new course, Foreign Minister Evar- ist Bartolo went as far as dis- owning "conspiracy theories" inviting supporters not to be surprised at other countries "who want to safeguard their wealth" and thus do not want "see our country being used against theirs when it comes to financial transactions". The problems under the spot- light FATF president Marcus Pley- er himself had last week framed the FATF decision in techno- cratic terms, identifying Mal- ta's three major shortcomings: namely the weakness in gather- ing financial intelligence on tax evasion and money laundering, the lack of transparency and accuracy in the beneficial own- ership register, and the blurred roles and responsibilities of the Tax Commissioner and the FI- AU. But most importantly he ex- plained that the FATF did not only look at technical and le- gal compliance but also how the rules are implemented on the ground. And crucially it is not just the FATF technocrats which the government has to convince, but also the govern- ments of Germany, the UK and the USA who for their own reasons reportedly insisted on greylisting Malta. With that in mind one can- not avoid the need of national reflection on what actually has put the international spotlight on long standing problems like tax evasion. For tax evasion has existed for ages and is struc- turally ingrained in the "ejja ha nirranġaw" culture which per- vades the Maltese way of doing things across the board – from planning and land use to tax ar- rangements. One can't avoid the conclu- sion that the greylisting was also a political act, triggered by an aversion towards a small state which opened itself to global financial transactions, in a context poisoned by high-lev- el corruption and an assassina- tion with political ramifica- tions. This also coincides with an international climate which is increasingly hostile to tax monies being siphoned from larger economies to smaller ones through tax competitive- ness. The Economist column Paint it grey: Muscat's curse or Muscat's actions drew the spotlight on Malta's long- standing fiscal problems, contributing to its inclusion in the FATF greylist everyone seeks to avoid. Abela now calls it "an opportunity". But beyond condemning Muscat's legacy, what does Bernard Grech bring to the table? asks James Debono