A Maltese bank at the heart of a money-laundering investigation has had its licence withdrawn by the European Central Bank.
Pilatus Bank, which opened four years ago, was officially closed down several months after its Iranian chairman and owner, Ali Sadr Hasheminejad, was charged in the US in connection with money-laundering and fraud.
The bank had also been accused of processing corrupt payments to Maltese officials by the investigative journalist Daphne Caruana Galizia, who was killed last year by a car bomb.
The Malta Financial Services Authority (MFSA), which regulates the country's banking industry and granted Pilatus a licence in 2014, said the ECB had acted on its request to close the bank.
In a statement on Monday the MFSA said: “Further to the authority’s proposal to the ECB to withdraw the authorisation of Pilatus Bank as a credit institution, the ECB’s governing council has decided to withdraw the authorisation of Pilatus Bank with effect from today.”
The EU began an investigation into Malta's regulation of the bank last year, following Ms Caruana Galizia's death, with the European Banking Authority (EBA) undertaking the inquiries.
Sanctions
Then in March, Mr Sadr was arrested in the US on charges that he had violated the country’s sanctions and anti-money-laundering rules.
According to the indictment, filed in New York, Mr Sadr participated in a scheme to illegally funnel $115 million in payments for a Venezuelan construction project to Iranian individuals and companies. He has pleaded not guilty to the charges.
Straight after his arrest the MFSA took control of Pilatus, freezing all transactions for customers, and banning executives and shareholders from withdrawing any funds from the bank.
In June, it filed a recommendation with the ECB for the withdrawal of Pilatus’s licence, on the grounds of Mr Sadr’s arrest and concerns that it had persistently breached liquidity rules since he was charged.
Reuters has reported that the European commission was considering actions against Maltese authorities over their handling of the case.
At the time of her death Ms Caruana Galizia was being sued in a US court by Pilatus and Mr Sadr in a lawsuit that accused her of malice, defamation and causing damage to the bank’s “reputation and actual and prospective economic relationships”.
Panama Papers
She had reported on the Panama Papers, which alleged links between the wife of the prime minister of Malta and shell companies that held accounts with Pilatus.
Pilatus had been set to open an office in London’s Mayfair in April 2017. The Maltese regulator had granted it a passport to operate in in the UK but it was never given permission to offer accounts to UK residents.
The bank, which reported €308 million of assets in 2016, was known to have held accounts for a senior official in the government of the Maltese prime minister, Joseph Muscat, and members of Azerbaijan's ruling family.
The ECB did not comment on the decision to withdraw Pilatus’s licence.
– Guardian News and Media 2018
