Malta, first EU state on international money laundering watch list | New
The inclusion of an EU member state on a list, drawn up by the Paris-based Financial Action Task Force (FATF), which includes countries like Zimbabwe, Syria and South Sudan, is a blow to the prestige of the island nation as a quality gaming licensing authority, at a time when the sector has come under media and political scrutiny.
Many sports betting and online gambling companies based in Tallinn and Estonia use a license issued by Malta, or have offices in Malta, or both. Online gaming affiliates, which promote online casinos and other sites for audiences such as the Scandinavian market, have also established themselves in Estonia in recent years.
The FATF made its announcement on Friday, the ERR online news reports in Estonian reports, and means the country will be under increased scrutiny over its activities, amid fears the island is a hotbed of money laundering , tax evasion, terrorist financing and other criminal acts.
The FATF says Malta has made progress in some areas, but further action is needed, while the Maltese government rejects the country’s addition to the list, noting that reforms have been underway over the past two years and adding that the authorities will cooperate with the FATF and other relevant bodies.
The gaming industry itself estimates that it contributed over € 1.5 billion to the Maltese economy in 2019, or around 10% of the country’s overall GDP.
Malta is one of the many jurisdictions whose gambling licenses are popular among online casinos and betting sites, others include the Isle of Man, the Channel Islands, Gibraltar and Curacao. The latter’s reputation is far from excellent, although the island nation, which is part of the Kingdom of the Netherlands, is not on the FATF list.
Only two countries are currently on the full “black” list of the FATF, namely Iran and North Korea, while Malta has joined 17 other states on the borderline “gray” list. No other EU country is on this list, with Albania being the only other European country to have appeared.
In October 2017, a Maltese journalist investigating corruption in the country – including links between the online gambling industry and organized crime – Daphne Caruana Galizia, was murdered in a car bomb, one of the many incidents that have occurred on the island over the past five years.
A recent Sunday Times report examining the (perfectly legal) white-label practice, whereby a gambling company enters the market of a country, in this case the UK, through a third-party licensee, referred to a Tallinn-based bitcoin game. company, which also has offices in Malta.
Estonia itself has been the center of a major money laundering scandal centered on the now defunct Tallinn branch of Danske Bank. More than 200 billion euros of potentially illicit funds would have passed through the agency portals between 2007 and 2015.
A gambling tax is levied on casinos and betting companies registered in Estonia, with the proceeds often earmarked for social programs. However, only a small number of gambling companies have licenses for operate in Estonia itself. The government’s recently unveiled state budget strategy, which included spending reduction proposals, has revived discussions on the tax system and overall tax revenues in Estonia.