ECB revokes license of scandal-hit Maltese bank


Wed, Nov 07, 2018 - Page 10

The European Central Bank (ECB) on Monday revoked the license of Malta’s Pilatus Bank Ltd, which has been at the center of a corruption scandal exposed by murdered Maltese journalist Daphne Caruana Galizia.

“The ECB’s governing council has decided to withdraw the authorization of Pilatus Bank with effect from today,” the Malta Financial Services Authority (MFSA) said in a statement.

The move to shut the bank had been recommended by the MFSA, it added.

An ECB spokesman confirmed the decision.

The MFSA in March froze the embattled bank’s assets after its Iranian chairman, Ali Sadr Hashemi Nejad, was arrested in the US on charges of circumventing US sanctions against Iran.

The US Department of Justice has accused Nejad, who was immediately removed as head of Pilatus Bank, of secretly funneling US$115 million through the US financial system to Iranian-controlled entities in breach of sanctions.

Caruana Galizia had linked accounts held at the bank by a number of top government officials to corrupt dealings. She was killed by a car bomb in October last year, sparking international outrage.

She was facing a defamation suit from Pilatus Bank at the time of her death.

Pilatus Bank is the latest EU bank to come under scrutiny over alleged corrupt payments, exposing what critics have called the bloc’s Achilles’ heel: a lack of coordinated efforts to tackle fraud.

Denmark’s largest lender, Danske Bank A/S, is being investigated over possible money laundering related to more than US$200 billion transferred through the Danish lender’s Estonian branch.

In February, US authorities accused Latvia’s third-largest lender, ABLV Bank AS, of large-scale money laundering with connections to North Korea’s nuclear weapons development program.