Malta in the eye of a financial tempest | Eurasia Diary - ednews.net

26 April, Friday


Malta in the eye of a financial tempest

Could a nation of 450,000 pose a threat to global efforts to track money laundering and enforce economic sanctions? Probes by local magistrates, US prosecutors and EU politicians are all asking the same question.

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A recent European Commission report on Malta warned that the country had made "limited progress in addressing the 2018 Country Specific Recommendations (CSRs) concerning money laundering, corruption and financial supervision."

A European Parliament report meanwhile described "systemized and serious deficiencies" in the rule of law in Malta, while a police investigation in Italy has alleged that the Sicilian Mafia infiltrated companies in the online-gaming sector some based in Malta to launder money.

As if that weren't bad enough for the Mediterranean investors' paradise, the EU's parliament recently voted to adopt a "tax harmonization” scheme that would create one common corporate tax rate throughout the EU, a move that could halve Malta's tax base.

Ana Gomes, a Portuguese European parliamentarian who leads the EU commission investigating rule of law in Malta, told DW that the country's current low corporate tax rate is "anti-European" and drains billions in revenue from other member states.

European lawmakers have proposed restrictions on cross-border betting, which would make the services provided by many Maltese companies illegal. 

To top it off, the IMF has called on Malta's authorities to take rapid action to ensure the long-term financial and operational independence of supervisory authorities, which it says is currently not the case.

To convince the rest of Europe it could be a trusted partner, Malta began instituting a series of financial and regulatory reforms. But is it too little too late?

Deutsche Welle

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