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US-Malta military deal receives backing amid claims it’s linked to money-laundering blacklist

By Dan Byrne

A controversial deal between the US and Malta is suggested to have been approved to help secure US support in preserving Malta’s financial reputation.

Maltese Government sources have hinted that the military personnel deal was finally backed by the Maltese cabinet – after years of stalled negotiations – because Malta is seeking Washington’s support in keeping the country off the global money-laundering list, the Times of Malta reported Tuesday.

Frequently a magnet of international criticism for its lax AML laws and enforcement, Malta risks being placed on the Financial Action Task Force’s (FATF’s) ‘grey list’ in a decision expected later this year.

The ‘grey list’ is a worldwide record of nations deemed to not be doing enough to tackle money laundering and terrorism financing.

Malta’s financial systems have suffered multiple reputational damages in recent times. Earlier this month, the country was downgraded to being only ‘partially compliant,’ with global tax transparency and information exchange practices by the OCED.

Additionally, in July a Council of Europe MoneyVal evaluation highlighted significant improvements to be made Malta’s financial crime prevention efforts. 

The deal which Malta’s cabinet have agreed with the US – allegedly in the hope of US backing in FATF assessment – concerns the rights of US military personnel active within Malta’s borders.

The US generally does not send its troops to foreign soil without assurances of legal status protections from the host country. This deal goes some way to provide that, and has been pursued by different US governments for decades, the Times of Malta reports.

The ‘watered down’ version of the deal allows both US and Maltese authorities to share jurisdiction over any US personnel and equipment stations in Malta.

While sources claim the deal is in support of Malta’s financial crime reputation, US Charge D’Affaires Mark Shapiro had previously maintained said that this doesn’t match with reality.

“The decision will be determined by many variables,” he previously told the Times of Malta. “There are lots of members of the FATF and the US is one of them. It is a strong voice, but it is not the only voice,” he added.

Cabinet backing means the deal will now go to the Maltese parliament. It will need the approval of two thirds of Maltese lawmakers to be officially adopted.

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