The 23 recommendations for Malta by the Group of States Against Corruption – better known as GRECO – must be seen as “a programme” of improvement in which “there is no finish line,” according to Bank of Valletta CEO Kenneth Farrugia.

After the presentation of the bank’s “excellent” results for 2023, where it registered a profit before tax of a quarter billion euro, asked Mr Farrugia how worried he is about the negative assessment delivered by the international body of Malta’s progress in beefing up its anti-corruption mechanisms.

“When it comes to control frameworks, these are not projects, they are programmes,” he said. “This means that they require continuous review and improvement.”

GRECO’s report was quite damning of the Maltese Government’s efforts – or lack thereof – to implement the recommendations first made back in 2019, which include strengthening of criminal investigations and measures to improve the transparency of lobbying and the declaration of assets by politicians.

The last few years have proven turbulent for Malta’s financial sector, with BOV undertaking broad reforms to overturn a negative assessment – also delivered in 2019 – by the European Central Bank and struggling to establish a new correspondent banking relationship for the US dollar after previous relationships were terminated.

In fact, the CEO pointed to Citi Group’s onboarding of BOV as its new US dollar correspondent bank as a highlight of 2023.

Nonetheless, he declined’s invitation to send a message to Government about the influence its foot-dragging may have on Malta’s international standing as a financial jurisdiction.

“We review comments made about control frameworks in Malta to see whether they are truly representing the state of play within the country,” he said, comparing the battle against financial crime to that of cybersecurity: “It’s a continuous programme of initiatives that you need to put in place.”

Mr Farrugia added that criminals involved in fraud and illicit financial dealings are sophisticated, often coming with legitimate businesses and forcing the bank to “dig deep” to find evidence of malfeasance.

“Continuous efforts are needed because risks change and challenges develop,” he said.


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