The European Central Bank has reportedly made a move to revoke the license of Malta’s Pilatus Bank.
ECB has reached a preliminary decision to revoke the license after its chairman was charged with money laundering, according to Reuters, which cited two ECB officials.
The bank was initially accused of processing corrupt payments for the Azeri and Maltese leadership. The claims were made by investigative journalist Daphne Caruana Galizia, who was killed a year ago by a car bomb. It was only then, for which there is no proven link to the reports she wrote about the bank, did the EU start investigating the case.
‘Serious gaps’ have since been found in the supervision of Pilatus. As a result, the ECB’s supervisory board has already agreed to withdraw the bank’s license, one ECB official told Reuters. However, the decision will be finalised only after some legal issues are resolved.
The second source also said that the process of revoking the bank’s license is in full wing, but aired more caution on its outcome until legal hurdles are overcome.
The chairman of the bank, Ali Sadr Hashemi Nejad, was arrested in the US in March on charges of money laundering and sanctions violation. After that arrest, the MFSA Maltese banking supervisor froze the assets of the bank and recommended the withdrawal of its license.
Representatives from the bank or ECB could be immediately reached for comment.
Earlier this year, The European Commission proposed to strengthen the fight against money laundering by handing the European Banking Authority new powers.
In response to a series of AML failures at ING, Deutsche Bank and Danske Bank, President Jean-Claude Juncker says there are concerns that AML rules are not always supervised and enforced effectively across the EU.
He said this not only creates risks for the integrity and reputation of the European financial sector, but may also have financial stability implications for specific banks. In response the European Commission has proposed to amend the Regulation establishing the European Banking Authority (EBA) in order to reinforce the role of the EBA in anti-money laundering supervision of the financial sector.
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