Money laundering: Pilatus Bank could lose EU licence
18 Oct 2018

The European Central Bank (ECB) is reportedly looking to revoke the licence of Pilatus Bank, following the arrest of its chairman over money laundering charges and allegations it processed corrupt payments.

Malta’s banking regulator has also previously recommended that the licence be withdrawn.

The ECB’s supervisory board has decided to withdraw the Maltese bank’s license but first needs to iron out some legal issues, an ECB official told Reuters, which said it made several attempts to contact the bank but was unsuccessful.

“A second ECB source confirmed that the process of revoking the bank’s license is under way but was more cautious on its outcome until legal hurdles are overcome,” the news agency said.

The EU began investigating Pilatus after the mysterious death last year of journalist Daphne Caruana Galizia, who accused the bank of processing corrupt payments.

In March this year the bank’s chairman Ali Sadr Hashemi Nejad was arrested in the United States over allegations of money laundering and sanctions violation. He pleaded not guilty to the charges.

And in June, Malta’s Financial Services Authority (MFSA) formally filed with the ECB a recommendation for the withdrawal of Pilatus’ banking licence.

MFSA issued a statement at the time saying Nejad, who is the sole and ultimate beneficial owner (UBO) of Pilatus Bank, “was indicted in the United States in relation to allegations of financial criminal offences. As a result of this indictment, the MFSA is no longer satisfied that the UBO is a suitable person as required by the Banking Act.”

It added that it had been monitoring the bank closely and noted that ‘the bank has been persistently breaching the liquidity coverage required by law since the indictment of the UBO.’

Pilatus has previously denied wrong doing.

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