Issue link: https://maltatoday.uberflip.com/i/821961
maltatoday, WEDNESDAY, 10 MAY 2017 News 8 THE governors of the Finan- cial Intelligence Analysis Unit (FIAU), which includes the At- torney General as chairman, has said a call for the publication of confidential FIAU reports was "leading to a misguided expec- tation for action which neither the FIAU as an intelligence agency, nor the chairman and other board members are able to take legally and in practice." Article 18 of the Prevention of Money Laundering Act pro- vides that the FIAU shall con- sist of a board and a director, who is entrusted to carry out the policy laid down by the board. The FIAU said that ever since 2002, this legal provision was strictly interpreted and im- plemented such that there is a clear and distinct separation between the policy direction and oversight of the board, and the operational activities con- ducted by the director and his staff. "Accordingly, the board does not involve itself in the opera- tional activities of the FIAU. The board is not provided with, it does not have access to, nor does it seek to obtain any infor- mation or documentation that the FIAU is in possession of in the exercise of its intelligence, analytical, and compliance su- pervision functions. "Operational information in the possession of the FIAU has always been considered as se- cret and confidential, and the board does not require access to it in order to carry out its responsibility as established by the Prevention of Money Laun- dering Act," the FIAU said – in- sisting that the board is never aware of suspicious transaction reports received by the FIAU or of their contents. "The board is not provided with, nor does it seek to, obtain case specific information on the intelligence work carried out by the FIAU, and is never aware of any information re- ceived or collected by the FIAU in its analytical and compliance work. "The board is not informed when reports or any other dis- closures are transmitted by the FIAU to the Police. These re- ports are not provided or oth- erwise made available to the board, they are not approved by the board, nor is the board priv y to their contents." Similarly, compliance super- vision reports sent by the FIAU to subject persons following on-site inspections are not pro- vided or otherwise made avail- able to the board, and do not re- quire the approval of the board, nor is the board priv y to their contents. "These reports are also never published and at the stage when they are issued, they only ad- dress the relationship between the FIAU in its supervisory functions and the subject per- son concerned. The separation between the board and the op- erational function of the FIAU has always been maintained throughout the years, and is considered indispensable for the proper functioning of the FIAU as an intelligence agency and to ensure that the director and his staff are able to operate within the strictest confiden- tiality and without any unnec- essary interference," the FIAU said. The FIAU also said it had carried out work in connec- tion with the revelations of the Panama Papers and the involve- ment of Maltese persons and companies. "That work is still being pursued. The board con- firms that it had been informed in generic terms by the direc- tor of the FIAU about the said work. "However, in line with the separation between the func- tion of the board and that of the director, the board was never provided with specific informa- tion on the intelligence work that was being carried out, nor with copies of reports transmit- ted to the Police." The board said it is not aware of the contents of these reports. "Neither the chairman nor any other member of the board has ever read or has ever been in possession of any copy of these reports, nor does the board have access to them." It added that the Prevention of Money Laundering Act does not give to the FIAU, (whether to the chairman or other mem- bers of the board or to the di- rector), any power to take any further action or to conduct criminal investigations or to in- struct the Police in this respect. "The board of the FIAU is bound by the strictest form of secrecy and confidentiality. Article 33 of the Prevention of Money Laundering Act ex- pressly provides that any of- ficial or employee of the FIAU who discloses that an analysis is being carried out, or that in- formation has been transmit- ted to the FIAU, or that infor- mation has been transmitted to the police for investigation, shall be guilty of an offence and liable on conviction to a fine or imprisonment." The members of the board are appointed by the Minister for Finance, and are nominated by the Attorney General, the Chairman of the Malta Finan- cial Services Authority, the Governor of the Central Bank, and the Commissioner of Po- lice. Two members of the board are appointed as chairman and deputy chairman by the Prime Minister. The current chair- man is the Attorney General, and his predecessor prior to 2010 was also the Attorney General. CONTINUED FROM PAGE 1 At the time, Labour was not yet in power. But the FIAU did not beat about the bush when it sug- gested that this could have been a "bogus loan" used to camou- f lage kickbacks when PEPs are involved. While it was claimed that the loan was in relation to Tonna's separation proceedings, the FIAU said that Tonna did enter into a deed of separation with his wife in August 2014, "[but] he ap- pears to be sufficiently wealthy to handle the costs of personal separation proceedings without need of third party funding." More importantly, the FIAU says it could not trace the original loan transaction, "notwithstand- ing an in-depth review of several bank accounts". The FIAU even said that it could not be excluded that "the agree- ment might have been drawn up more recently and backdated in order to justify the transfers to Mr Schembri." But the FIAU said it could not determine this matter itself, but a police investigation could reveal the data when the document was actually drawn up, in the event that Nexia BT computer servers are examined. So far the Attorney General has insisted that he does not have any power to initiate a criminal in- vestigation, which power is only granted to the Commissioner of Police. Magistrate Aaron Bugeja – who is carrying out an investigation into allegations that the Maltese prime minister's wife owns an offshore Panamanian compa- ny – said that the allegations of kickbacks to Keith Schembri will have to be investigated by a new magistrate. Keith Schembri has reacted to the report saying that he had "never been informed or other- wise made aware of the existence of any such report. Neither have I ever been questioned by any of- ficial of the FIAU nor been asked to provide any information to the Unit." Schembri has said he will not comment on the "apparent con- clusions" of the report "apart from re-affirming that I have never received, solicited, or oth- erwise induced anyone to give me monies I was not rightfully due." He has also stated that it would have made no sense for him to use a personal bank account, registered in his name in Malta and making use of it by means of a credit card, "making the exist- ence of same account and funds known to all regulatory entities." Schembri has insisted that the timing of the publication of the "alleged" report, right in the mid- dle of an electoral campaign, "[smacked] of political expedi- ency." Original loan transaction could not be traced Keith Schembri welcomed the selection of the magistrate which takes place at random FIAU: 'Misguided expectation for action' FIAU publishes explainer on its duties: 'Attorney General never aware of FIAU's work' Attorney General Peter Grech is the chairman of the FIAU board