Panama, Pilatus and golden passports punish Malta in corruption index ranking

Malta loses six points in anti-corruption ranking for 2018 one year after assassination of journalist Daphne Caruana Galizia

Pilatus Bank's licence was terminated after the arrest of its owner in the United States
Pilatus Bank's licence was terminated after the arrest of its owner in the United States

Malta underwent its sharpest decline ever in Transparency International’s Corruption Perceptions Index, decreasing by six points to 54. 

With a score of 54, Malta decreased by six points over the last three years, moving from 60 in 2015 to 54 in 2018. 

“This significant drop comes as no surprise more than one year after the assassination of journalist Daphne Caruana Galizia, who was killed while reporting on corruption and who posthumously received the 2018 Anti-Corruption Award,” TI said in its analysis. 

The transparency NGO also said Malta was embroiled in scandals involving the Panama Papers and the collapse of Pilatus bank, “as well as its ‘Golden Visa’ scheme, which sells Maltese citizenship to wealthy overseas investors.” 

It also said that the Council of Europe’s Venice Commission had “concluded there was a serious rule of law problem in Malta’s judiciary.”

READ MORE 2018: Malta corruption perception ranking relatively unchanged over last year, 'improves' by one point in Transparency International index

Hungary and Malta saw the sharpest decline in their respective CPI scores in recent years, “allowing corruption to worsen”, TI said - Hungary decreased by nine points over the last seven years, moving from 55 in 2012 to 46 in 2018, after imposing laws on restrictions on “foreign funded NGOs” and introduced additional taxation for NGOs that “support immigration”, while making this support a criminal offence. In addition, Hungary also passed a law that establishes a new system of administrative courts and expands the power of the minister of justice to appoint judges. These courts will have jurisdiction over matters of corruption, elections and protests. 

At the same time, Hungary faces allegations of a misuse of EU funds, which Hungarian police have yet to investigate. In response to these challenges, our chapter, Transparency International Hungary is working to provide expert support and research, serve as a resource to investigative journalists and empower citizens to monitor public expenditures.

Fourteen of the top 20 countries on this year's Corruption Perceptions Index (CPI) are from Western Europe and the European Union (EU). With 88 points, Denmark returns as a global leader on the CPI, though its score remains unchanged from last year. In the region, Denmark is closely followed by Finland, Sweden and Switzerland, which each score 85. 

At the bottom of the region, Bulgaria scores 42, dropping one point since last year. Bulgaria is followed by Greece (45), which dropped three points since 2017, and Hungary (46), which dropped eight points over the last five years. 

With an average regional score of 66 out of 100, Western Europe and the EU are doing far better than other parts of the globe. However, for a region that prides itself on some of the most robust integrity systems in the world, the patchwork of partially overlapping national and EU-level integrity systems presents its own problems and still has a long way to go to tackle corruption effectively. 

Even top scoring countries like Denmark are not immune to corruption. While the CPI shows the Danish public sector to be one of the cleanest in the world, corruption still exists, as seen with recent scandals involving Danske Bank. Specifically, the Estonian branch of Danske Bank used more than 30 different currencies to launder €200 billion (US$227 billion) over nearly a decade. One of the most serious cases of transnational money laundering, money flowed from Russia into the EU through Baltic bank branches using shell companies registered in the UK.

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