European online gaming hub removed from FATF gray list

Posted on: June 16, 2022, 4:19 a.m.

Last update: June 16, 2022, 4:19 a.m.

Malta, Europe’s leading online gambling hub, has been removed from the Financial Action Task Force (FATF) gray list. This is news that will have politicians in the small Mediterranean island state and its online gambling industry gasping.

Malta FAFT
Malta’s capital, Valletta, pictured. The FATF is pleased that the country has made progress in repairing its troubled financial underbelly. (Picture: The Times)

Industry is attracted to Malta by its tax breaks, favorable regulatory system and EU membership. The latter guaranteed smooth financial services with the rest of Europe.

But in June 2021, Malta had the dubious honor of becoming the first EU country to appear on the FATF’s gray list, finding itself in the same boat as Yemen, Syria and Burkina Faso.

The downgrading of Malta’s financial status has constrained the country’s banking sector, making it less nimble and more expensive to hire.

Businesses based in a greylisted jurisdiction are assumed to be higher risk and are therefore subject to more red tape. This could make everything trickier and more costly, from the movement of player funds to the distribution of dividends.

What is the FATF?

The FATF is an intergovernmental organization founded by the G7 to combat money laundering and the financing of terrorism.

Malta weather reports that the country was given the green light after a vote by FATF officials on Wednesday. The official announcement of the decision is scheduled for Friday afternoon.

FAFT is said to be pleased that Malta has successfully implemented a series of reforms it recommended last year. These include changes to the way it fights tax evasion, collects information on the ultimate beneficial owner and how it shares information with local and international authorities.

He was placed on the gray list after long-standing international criticism of government policies, such as the sale of Maltese citizenship and its failure to prosecute key government officials accused of corruption.

Murder of Caruana Galizia

In 2019, the government of Labor Prime Minister Joseph Muscat collapsed due to links between high-level lawmakers and Yorgen Fenech, the country’s largest casino owner.

Fenech has been accused of orchestrating the 2017 car bombing of Maltese anti-corruption journalist Daphne Caruana Galizia. The murder made international headlines.

At the time of her death, Galizia was investigating whether a government contract to build a power plant in the country had been awarded corruptly to Fenech’s business empire.

A company later controlled by Fenech was preparing to make large payments to fictitious accounts held by Malta’s former energy minister, Konrad Mizzi, and Muscat chief of staff, Keith Schembri.

The two men deny corruption and complicity in the murder of the journalist.

Mary I. Bruner