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3 NEWS 16.6.2022 PAUL COCKS THE war in Ukraine, so soon after the COV- ID-19 crisis, had many businesses scrambling to maintain sufficient workflow capital, neces- sitating the introduction of a second emergen- cy liquidity support scheme, BusinessToday has learned. e Liquidity Support Guarantee Scheme (LSGS), launched by the Malta Development Bank (MDB), is the second emergency liquidity support measure as part of an aid package in response to the Ukraine crisis. e first measure was in support of grain im- ports. e LSGS consists of two measures; one open to all businesses affected by the crisis (LSGS-A) and the other specific to the fuel and oil im- porters (LSGS-B). MDB chairman Prof Josef Bonnici told Busi- nessToday that various commodities, like grain and fuel, had been very negatively impacted by the Ukraine war. Bonnici said the scheme was deemed neces- sary to help maintain the slow recovery under way following the COVID-19 pandemic. "Many businesses were still struggling follow- ing the pandemic," he said. "e Ukraine war nullified that progress and many businesses were left floundering under the added pres- sure." e Russian invasion of Ukraine led to the prices of grain, fuel and their many derivatives skyrocketing. In Malta, many importers had to absorb the price hikes for many weeks, but the price in- creases still filtered down to the consumers the longer the crisis stretched. New measures LSGS-A is aimed at all sectors of the econo- my and all types of businesses irrespective of size. It will enhance access to bank financing to support undertakings whose cashflow was ad- versely impacted by the disruptions in supply chains and other pressures brought about by the Ukraine crisis. LSGS-B is directed towards fuel and oil im- porters. e objective is that of supporting firms operating in this sector to ensure security of strategic supply in view of developments re- lated to war in Ukraine which have had a signif- icant impact on the energy industry. Both measures are guaranteed by the MDB and backed by a Government Guarantee cov- ering 90% of each working capital loan under LSGS-A and 80% under LSGS-B. Facilities under both measures benefit from an interest rate subsidy of up to 2.5 percentage points on the outstanding amount of the working capital loan, subject to a minimum interest payment by the borrower of 0.1%. e interest rate sub- sidy is applicable during the first two years of the loan starting from the date of first disburse- ment of the loan. e MDB is making available a total portfolio of €100 million in working capital loans under LSGS-A and a portfolio of €50 million under LSGS-B. e maximum term of loans is up to 6 years and the maximum loan amount is deter- mined on a case-by-case basis based on turn- over, energy costs and liquidity needs. Both measures are available until the end of the year. With the combination of the guarantee and the interest rate subsidy, these measures will be facilitating the availability, accessibility and affordability of cashflow into the real economy during such challenging times. In order to qualify for these subsidized loans firms are required to demonstrate in a clear manner that their cash flow has been adversely and directly affected by the aggression against Ukraine. Businesses will be able to apply for the loans with the credit institutions that will soon be ac- credited by the MDB. e list of credit institutions will soon be made available on the MDB website, along with more details on both measures. MDB launches €150m emergency liquidity support scheme KURT SANSONE MALTA was taken off the greylist in a secret vote during the plena- ry of the Financial Action Task Force on Wednesday. e decision comes one year after Malta was labelled an untrust- worthy financial jurisdiction by the global watchdog. e formal announcement is expected to be made on Friday when the Berlin meeting comes to an end. In 2021, Malta was placed on the greylist after the FATF found deficiencies in the fight against tax evasion and the way ultimate beneficiary owners are listed. Malta was placed under increased scrutiny by international as- sessors and bodies as a result of greylisting, causing problems for operators in the financial services sector. e latest decision comes four months after the FATF publicly announced that initial indications showed that Malta had substan- tially completed the necessary reforms and appeared to have ad- dressed the shortcomings identified. Malta had to implement a long list of changes on how to fight tax evasion, collect information on ultimate beneficial ownership, and how this information is shared between Maltese and international authorities. e vote on Wednesday was held on a draft resolution, drawn up by evaluators, that was discussed in another secret meeting held earlier this year. It is typical in votes like these that the country under scrutiny has no say, although lobbying does take place. e Nationalist Party welcomed the news, adding that Malta should have never made it to the greylist in the first place. It said Bernard Grech was right when he had said it is possible to get Mal- ta off the greylist within three months of the election. e Malta Developers Association also welcomed the news. Josef Bonnici FATF plenary takes Malta off greylist

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