FATF greylisting: Almost 90% of business fear negative economic impact

Grey skies ahead for local businesses as they grapple with the new realities of the FATF greylisting

Malta was placed under increased monitoring by the FATF, joining a list of countries colloquially known as the 'greylist'
Malta was placed under increased monitoring by the FATF, joining a list of countries colloquially known as the 'greylist'

Almost 90% of Maltese employes fear that the FATF greylisting will leave a negative impact on the Maltese economy, a new study shows.

This result comes from a survey carried out by the Malta Employers' Association into the perceptions of businesses about Malta's recent greylisting by the Financial Action Task Force (FATF).

The survey reveals that 88% of respondents believe that the FATF greylisting will negatively impact the Maltese economy, with 64% anticipating strong repercussions.

71% of companies anticipate that the greylisting will affect their business directly, and 63% of respondents reported that the greylisting will be affecting them within the coming six months.

Companies in financial services, igaming and other services are expecting stronger repercussions than manufacturing, wholesale and retail, and tourism.

Businesses are also concerned about rising compliance costs, with some companies having resorted to employing additional personnel to deal with the bureaucracy of added compliance.

The survey results conclude that the main reasons attributed to the grey listing are money laundering activities, a defective rule of law and justice system, institutional corruption, lack of transparency and weak institutions.

The most salient recommendation submitted by respondents is the need for an effective and efficient justice system; the prosecution of corrupt politicians, PEPs and business people; the resignation of implicated politicians and the implementation of Moneyval/FATF recommendations.

While saying that it does not want to be alarmist, given that many areas of the economy are performing well, the MEA warned that the longer Malta remains greylisted, the more extensive the damage and the longer it will take to recover a tainted international reputation.

“It is regretful that the Association, together with other social partners, have been flagging governance and reputational issues for years, but little notice was paid to these warnings. There were too may shady deals involving politicians, phantom jobs in the public sector, and a general reluctance to hold perpetrators to account,” the association said.

MEA offered its full commitment to resolving the matter in the shortest time possible, but added that the greylisting comes as a serious threat to the social and economic fabric of our society.

“Ultimately, the biggest threat is not the greylisting itself, but the conditions which caused it,” MEA remarked.