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MALTATODAY 17 July 2022

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2 maltatoday | SUNDAY • 17 JULY 2022 NEWS N ICOLE M EI LAK WITH the euro tumbling to parity with the dollar, Maltese economy experts are sensing troublesome times for imports and public finances. Last week the value of the eu- ro fell to its lowest level in 20 years, meaning European citi- zens will have to fork out more euro to buy the same dollar products they used to. There's a common consensus among Maltese economists, including the top brass of the Central Bank and Stock Ex- change, that a weak euro will see increasing costs for local importers, especially for those who make dollar purchases. Edward Scicluna, Governor of the Central Bank of Malta, explained that Maltese import- ers will have to pay more euro to acquire the same amount of dollars for goods and services outside the euro area. "Exporters on the other hand will find that the euro price they had quoted will require less dollars in the US or ster- ling in the UK, and thus their prices become more competi- tive when compared to similar goods produced in those re- spective countries." Philip von Brockdorff, an as- sociate professor at the Uni- versity of Malta, explained further that a weak euro will impact Malta's imports from non-EU countries if those im- ports are paid in US dollars, or if the raw materials of those products originate from third countries. "The price of raw materials sourced from EU suppliers, but originating from third countries, could also be im- pacted by the strong US dollar relative to the euro," he said. Joseph Portelli, Chairman of the Malta Stock Exchange (and a former foreign exchange trader himself), agreed that a weak euro will amplify current inflationary pressures, espe- cially with regards to products traditionally purchased or val- ued in dollar terms. "On the other hand, the ad- vantage to seeing a weak euro is it makes European exports more competitive," he said. Economist Stephanie Fabri similarly remarked that Mal- ta's balance of trade with the US, at least when it comes to goods, is negative, meaning that Malta imports from the US more than it exports. "This will impinge on our imported inflation." EY partner Chris Meilak said the effects of this on the Mal- tese economy will depend on how reliant a business is on foreign trade and energy. "For Maltese companies that trade overseas, their foreign revenue (in dollars) is now worth more when converted to euro and brought back home. For local consumers and lo- cal craftsmen already feeling the inflationary burden, it can play into the price of imported commodities which will fur- ther inflate their costs of living and production, respectively." From the Chairman of the Malta Stock Exchange to the Governor of the Central Bank, the verdict is that a weak euro could make trade challenging while PILATUS WARRANTS, PAGE 1 Apart from Hasheminejad, who is believed to be living in the USA after his arrest and lat- er acquittal on sanctions-busting charges, the other bank officials named in the IAWs are Pilatus Bank operations chief Luis Rivera, now living in Texas; operations supervisor Meh- met Tasli; and director Hamidreza Ghambari. Police have so far initiated action against Pila- tus Bank as a financial entity, and former legal officer Claude Anna Sant Fournier, on charges of money laundering. The prosecution believes Sant Fournier repeatedly made unexplained "ad- ministrative mistakes" which led investigators to believe that she was assisting and abetting the laundering of money. Government sources following the IAW pro- cess told MaltaToday they are cautious about the prospects of extradition from the United States: "In the first place, the suspects are yet to be located. Clarifications on the nature of the possible charges will be sought, and extradition will be resisted, which means court proceedings can be expected in a bid to stall the process." Pilatus Bank was shut down by the ECB and the MFSA in March 2018 after Pilatus owner Ali Sa- dr Hasheminejad was arrested by FBI at Dulles Airport, charged with breaching sanctions against Iran when he funnelled $115 million in payments to his Iranian family's companies. Hasheminejad had been found guilty of evad- ing US economic sanctions by a jury in the Unit- ed States in March 2020. But four months later the guilty verdict was vacated by the US courts, and his case dismissed after the US government admitted it had withheld a piece of evidence that could have been exculpating. Hasheminejad also requested an affirmation that the US government would not seek or co- operate with any immigration removal proceed- ings against him. In reply, the US Attorney's Of- fice of the Southern District of New York, said it would "not seek or cooperate with any immigra- tion removal proceedings against Sadr." Pilatus Bank was also fined a record €4.9 mil- lion by the FIAU for letting millions in suspect funds flow through Malta unchallenged. Pilatus: from Egrant, to sanctions arrest, ac- quittal and fightback Hasheminejad ran the private bank Pilatus Bank in Malta from 2013, dealing with millions in reserves owned by the Azerbaijani ruling fam- ily and oligarchs. His bank was implicated in the Egrant affair, when the late journalist Daphne Caruana Gal- izia claimed it had processed a $1 million pay- ment from the Aliyevs of Azerbaijan to the wife of former prime minister Joseph Muscat. The allegation was disproven in 2018 by a Maltese magisterial inquiry along with other allegations she made about Pilatus Bank, but by then the banks' other dealings for Azerbaijan had come under the lens of financial investigators. When Hasheminejad was arrested in the USA in Feb- ruary 2018, the Maltese financial regulator shut down the bank and started an investigation. A forensic review of Pilatus Bank found "com- monly accepted red flags for money launder- ing" involving the daughters of Azerbaijan rul- er Ilham Aliyev and the sons of his minister for emergency situations Kamaleddin Heydarov, and requested roping in the United Arab Emir- ates, New Zealand, the United States, the United Kingdom, Germany, China and Turkey for co- operation into the investigation. The report identified 117 suspicious trans- actions from companies owned by the Aliyev daughters, such as Sahra FZCO, and the Hey- darovs, to a Dubai-based company called Palma Management Consulting. While the Egrant inquiry found no evidence of Azerbaijani money passing to Joseph Muscat or his wife, who had no bank account at Pila- tus, the foreign experts in the Pilatus inquiry recommended further investigative steps on the Egrant investigation. After the expungement of Hasheminjead's guilty verdict, Pilatus's owners Alpene Ltd filed cases in the United States law courts against the competent persons appointed by the MFSA to manage the shuttered banks' assets. The defend- ants, which included a European Central Bank supervisory board member One of the defendants, Elizabeth McCaul, de- scribed the lawsuits as "a continuation of Sadr's scorched-earth litigation strategy", accusing him of harassment "by pursuing irrelevant inquiries and invading communications and documents protected from disclosure." Alpene also filed for restitution and additional compensation in a case it filed against Maltese government in the World Bank's International Centre for the Settlement of Investment Dis- putes (ICSID).

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