Last year, when the Panama Papers information was publicly disclosed, two senior members of the Government of Malta were shown to be using the law firm of Mossack and Fonseca, to conduct suspicious offshore financial business. Malta's reputation as a corruption-free jurisdiction was tarnished as the direct and proximate result, but the injury is believed to have much more severe than mere reputation damage.
Since the release of the Panama Papers, Maltese media have reported that a number of local banks have lost their correspondent relationships with US financial institutions. The situation became so serious that the country's prime minister traveled to New York, in what many observers believe was a mission to seek to restore those corespondent accounts, and assure the global banking community that the two instances of possible corruption were an aberrant event, and that Malta can be trusted.
Damage control, regarding the roles of the government official named, appears to be ineffective, due in part to a lack of action against those officials, and Malta will now have to move in a direction to assure American bankers that its client base has no surprises, and that corruption is non-existent. That can only happen through total transparency, regarding bank customers, and again we remind our readers that KYCC, Know your Customer's Customer, appears to be the only solution that major onshore banks will accept. We hope that Malta's bankers will respond to the challenge, and offer our advice and assistance, as we do for all of our readers with a compliance problem.
Chronicles of Monte Friesner
Contributed by Kenneth Rijock