MEPs slam Pilatus Bank in letter to the European Banking Authority

EBA inquiry launched following a formal request by the European Commission’s directorate-general for justice

Pilatus chairman Seyed Ali Sadr Hasheminejad
Pilatus chairman Seyed Ali Sadr Hasheminejad

22 MEPs from across political groups have expressed serious concerns over the fact that the Malta-licensed Pilatus Bank continues to operate in the EU.

In a letter to European Banking Authority chairperson Andrea Enria, the MEPs that formed part of the PANA committee as well as the delegation on rule of law to Malta said there was leaked evidence and first-hand testimony that place Pilatus Bank “at the centre of illicit financial flows from Malta’s citizenship-by-investment scheme, the sale of state assets, and unexplained inflows from high-risk jurisdictions like Azerbaijan to Maltese politically exposed figures.”

Pilatus Bank is a fully-licensed eurozone bank, which now operates a branch in London in addition to its headquarters in Malta.

The MEPs saiod that “any proceeds of criminal activity laundered through it contaminate European financial and real estate markets and can have a potentially harmful effect on regulatory and political institutions at both a national and a European level.”

“We have observed with deepening concern the apparent impunity with which the bank continues to operate in Malta. We view the reluctance of the competent Maltese authorities to act as further evidence of regulatory capture, where the close personal and financial links between Pilatus Bank, the national supervisory authority and the executive branch of government, have worked to suppress any effective national checks on the bank’s operations.”

They also said that Pilatus Bank was left free to pursue investigative journalists and whistleblowers, stating that all independent news outlets in Malta, including the assassinated journalist Daphne Caruana Galizia who was one of its most strident public critics, received threats of vexatious and potentially crippling lawsuits in the US and UK from the bank’s lawyers.

“That what began as a money-laundering and terrorism financing issue has now grown to become a threat to freedom of expression in Malta, illustrates the depth and harmful impact of allowing even a small private bank to operate unchecked in a Member State.”

The MEPs also accused the Maltese authorities of ignoring the public evidence of serious anti-money laundering violations, and that Pilatus Bank’s client list features politically exposed persons from Azerbaijan, Angola, and Malta, such as the Prime Minister's chief of staff Keith Schembri.

“Considering that Pilatus Bank has succeeded to an unprecedented degree in curtailing negative press coverage of its operations, in light of the compelling evidence of regulatory capture in this case, and in view of the clear implications for Europe as a whole of the bank’s continued operation without adequate scrutiny, it is of crucial importance that the European Banking Authority’s inquiry into the bank is in-depth, effective, and independent of Malta’s national authorities.”

The MEPs asked to be kept informed of any developments in the inquiry. The inquiry by the European Banking Authority was launched following a formal request by the European Commission’s DG Justice.

Spanish Liberal MEP Maite Pagazaurtundúa and MEP David Casa, who led the effort on this letter, stated: “We are confident that the very serious revelations concerning Pilatus Bank will be thoroughly investigated by the European Banking Authority and that the EU’s financial system will be protected from the laundering of the proceeds of criminal activity”. MEP David Casa had sent the FIAU reports to the European Commission in November last year. The European Central Bank is also investigating Pilatus Bank and is currently assessing whether the situation justifies its direct intervention following a request made by David Casa last December. 

The MEPs who signed the letter are: - MEP Maite Pagazaurtundúa (ALDE) - MEP David Casa (EPP) - MEP Werner Langen (EPP) - MEP Ana Gomes (S&D) - MEP Monica Macovei (ECR) - MEP Stelios Kouloglou (GUE) - MEP Esther de Lange (EPP) - MEP Dariusz Rosati (EPP) - MEP Heidi Hautala (Greens) - MEP Sven Schulze (EPP) - MEP Petras Austrevicius (ALDE) - MEP Matt Carthy (GUE) - MEP Martina Anderson (GUE) - MEP Lynn Boylan (GUE) - MEP Liadh ni Riada (GUE) - MEP Markus Ferber (EPP) - MEP Francis Zammit Dimech (EPP) - MEP Sophie in`t Veld (ALDE) - MEP Thomas Mann (EPP) - MEP Roberta Metsola (EPP) - MEP Frank Engel (EPP) - MEP Takis Hadjigeorgiou (GUE).

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