‘I won’t be writing any thank you notes’: Notes on post-grey list Malta

Malta’s removal from the FATF grey list is tremendously welcome news for the Maltese economy. In an international environment that is increasingly grim, spending more time under the shadow of the greylisting cloud would have been the last thing the country needed.

Major credit is due to local regulators who have worked tirelessly to enhance the country’s capabilities in the sector. And, while I remain sceptical of our political class, it’s fair to say that regulators couldn’t have ramped up their efforts so effectively without bigger budgets and political support. It would also be amiss not to acknowledge that Malta has initiated a number of high-profile prosecutions against prominent political and business figures, to an extent which is more or less without precedent.

Nevertheless, we should be wary of triumphalism.

First of all, while getting out of the grey list is certainly a positive development, the blunt truth is that finding ourselves on the grey list in the first place was a critical failure for our political class. I won’t be writing any thank you notes.

Secondly, the country’s reputation will take a long time to restore. Compliance people tend to be risk averse, and this probably means that Malta will face a long stay on many an institution’s ‘high risk’ list.

Thirdly, we face the risk of complacency. Now that greylisting has been lifted, the temptation to go back to old ways will certainly be great. This would be foolish, because of course the FATF and MONEYVAL processes are cyclical, and we will be assessed once more in a few years.

Having said that, with the pressure of greylisting removed, it would be healthy to take stock of current rules and procedures in order to remove flab while retaining substantive effectiveness. In the inevitable rush to demonstrate improved compliance, various inefficiencies have been introduced, and we need to find ways to eliminating these without harming the integrity of the anti-financial crime effort.

But, most of all, we need to bear in mind that combatting financial crime is not simply an administrative process. Financial crime is a deeply harmful social ill and we need to continue fighting it day by day, not to please an examiner, but for the good of our community.