As published on timesofmalta.com, Tuesday 20 July, 2021.
The police are expecting the authorities to refer to them a number of tax evasion and money laundering cases as the country scrambles to get off the grey list of untrustworthy jurisdictions.
Police sources told Times of Malta they were informed by their superiors at the Financial Crime Investigation Department to expect an influx of fresh cases they are to prioritise in a bid to prove the country is effectively fighting tax evasion and other financial crimes.
The offences are being compiled by the Inland Revenue Department’s tax compliance unit, which is reviewing its caseload. The unit has been directed to hand over any cases it feels could merit criminal investigation.
Sources said this was a departure from the long-standing practice that saw the fiscal authorities handle such matters internally as administrative rather than criminal cases.
Earlier in July, deputy police commissioner Alexandra Mamo said the police are giving top priority to investigating tax evasion.
There was just one criminal prosecution of tax evasion in 2019, seven in 2020 and two so far this year.
Meanwhile, the Malta Business Registry is understood to be conducting an internal review of ultimate beneficial ownerships of companies featured on its databases. Sources said the aim is to identify fraudulent or incorrect ownership information meant to conceal the real ownership of corporate structures.
Malta was, last month, put on the Financial Action Task Force’s so-called grey list of jurisdictions that are not deemed to be doing enough in the fight against money laundering.
The Maltese government has since reached an agreement with the FATF. At the heart of the plan is an improved commitment to effectively fight tax crimes by using intelligence to catch tax cheats and better policing of ultimate beneficial ownership rules.
FATF president Marcus Pleyer said that, though Malta has the right legal framework in place, its implementation of such legal provisions was not up to scratch.
Malta’s National Coordination Centre, which is tasked with getting the island off the grey list, has already set the wheels in motion, calling on tax officials to start prosecuting cases.
Sources at the tax department said this could present an issue of “two weights, two measures”.
“There is a risk that we could be viewed as escalating action on tax misdeeds simply to get off the grey list. This is a defence we will likely hear when and if these cases end up in court,” one senior source at the department said.
Action plan key points
1. Showing that ownership information for companies based in Malta is accurate and that the authorities crack down decisively when information about company ownership is found to be inaccurate.
Gatekeepers, including those in the private sector, that do not comply with their obligations to obtain accurate and up-to-date beneficial ownership must be sanctioned.
2. Enhancing the use of financial intelligence by the government’s Financial Intelligence Analysis Unit to support the authorities pursuing criminal tax and related money-laundering cases. This includes clarifying the roles and responsibilities of the Revenue Commissioner and the FIAU.
3. Focusing FIAU analysis on criminal tax offences, to get it to produce intelligence that helps Maltese law enforcement detect and investigate cases in line with the country’s identified money-laundering risks related to tax evasion.