European Commission wants MFSA investigated for potential conflicts of interest

The European Commission should assess whether the Malta Financial Services Authority (MFSA) - Malta’s financial services and banking regulator - is free from conflicts of interest to carry out its supervisory duties.

In a letter sent to MEP Ana Gomes, Commission vice president Frans Timmermans said that “ the Commission fully agrees that the European Banking Authority (EBA) should assess whether the Maltese banking supervisors are fully equipped and free from conflicts of interest to perform their supervisory duties”.

“The EBA should also assess whether the MFSA has fulfilled its obligations given the apparent lack of action against private banking institutions that continue to hold a license to provide services in the EU,” Timmerans told Gomes.

The MEP, who led a European Parliament fact-finding mission to Malta last November, following the heinous murder of Daphne Caruana Galizia, wrote to Timmermans in April saying that the revelations from reporting by the Daphne Project – a consortium of journalists from several news organisations around the world – were damning, and a cause for great concern.

In her letter she explained the consortium had published further details about the dealings of Tourism minister Konrad Mizzi, OPM chief of staff Keith Schembri’s and Economy minister Chris Cardona and told Timmermans that she considered the “complacency of the European Commission” to be unacceptable. Gomes requested that he urgenly meet the members of the ad hoc Delegation on the rule of law in Malta.

In his reply, Timmermans stressed that the Commission was adamant that an impartial investigation into the journalist’s killing needed to be carried out and that “if the Commission were to see scope and determine it has competence to act” on information brought forward by the Daphne Project, it would do so.

He rejected Gomes’ claim that the Commission was being complacent, pointing out that Justice Commissioner Vera Jourova would also be in Malta as part of the Commission’s continuous assessment of developments in Malta.

Timmermans said that while Malta had failed to transpose the EU’s 4th Anti-money Laundering Directive by June 2017, in January 2018 it notified the commission of its intention to do so.

On the Individual Investor Programme, Timmermans said the Commission was currently undertaking a union wide fact-finding study to help prepare the Commission’s report on such investor citizenship schemes.