Ethics and governance in the European Financial centers

MONEYVAL is a Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism that was established in 1997. This evaluation and peer pressure mechanism reviews the anti-money laundering measures and measures to counter the financing of terrorism in Council of Europe member States (and Council of Europe applicants which apply to join the terms of reference) which are not members of the Financial Action Task Force (FATF).

The 3rd round evaluation report on Malta, as adopted at MONEYVAL’s 24th Plenary meeting (10-14 September 2007) and published late November 2007.


Read MONEYVAL report on Malta

As explained in the previous articles, I was surprised to read in the FATF report 2006-2007 the text " Thanks to a generous grant from Luxembourg, the FATF has been working to improve its information technology systems, with a view to providing FATF delegations with better access to confidential documents. This system will be strengthened over the coming year and the FATF will then be in a position to enhance its public website." (paragraph 54 page 17 of the English text)

Let's adapt the text to other contexts:

Variation 1: for a tribunal

Thanks to a generous grant from a litigant to be judged next year, the tribunal has been working to improve its information technology systems, with a view to provide those to be tried with better access to information. This system will be strengthened over the coming year and the tribunal will then be in a position to provide with judgement online.

Variation 2: for an external auditor

Thanks to a generous grant from one of its auditees, the audit firm has been working to improve its information technology systems, with a view to providing auditees with better access to confidential documents. This system will be strengthened over the coming year and the audit firm be in a position to enhance its public website.

Variation 3: for a commission tenders

Thanks to a generous grant from a tender, the commission tenders has been working to improve its information technology systems, with a view to providing tenders with better access to confidential documents. This system will be strengthened over the coming year and the audit firm will be in a position to enhance its communication.

Variation 4: for a City Hall

Thanks to a generous grant from a citizen who may ask for a building permit, the City Hall has been working to improve its information technology systems, with a view to providing citizens with better access to confidential documents. This system will be strengthened over the coming year and the City Hall will be in a position to enhance its communication.

Variation 5: for a bank

Thanks to a generous grant from a rich client to be assessed in the framework of AML procedures, the bank has been working to improve its information technology systems, with a view to providing clients with better access to confidential documents. This system will be strengthened over the coming year and the bank will be in a position to enhance its communication.

Variation 6: for a disciplinary committee of a regulatory body

Thanks to a generous grant from a bank/audit firm, the committee has been working to improve its information technology systems, with a view to providing members with better access to confidential documents. This system will be strengthened over the coming year and the committee will be in a position to enhance its communication.



All the situations are definitely corruption situations: a tribunal, an audit firm, a commission tenders, a City Hall, a bank or a regulatory body have their proper financing (income tax, salary, fees...) and are not supposed to receive a “generous grant” especially when they have a decision making power or a control to do relating to the one who provides the “extra money”.

That is the reason why the FATF should not have accepted a Grant from Luxembourg all the more than there are many public red flags in this jurisdiction including corruption behaviours that are the visible part of the iceberg, and unfortunately, because of this corruption, nobody is willing to tighten up the ship and eliminate negligent people, which is not responsible as the small size emphasizes dysfunctions.

Finance it too serious to be untrusted to negligent people that have become a threat for the financial community worldwide unless they cut all visible "rotten branches" in the small center where everybody knows everyone and where self regulation is a charade.

The frontage of business ethics is definitely cracked because of Luxembourg. Time is up for international organisations to wake up and smell the coffee. I have been warning them since a couple of years.

International organisations play their credibility.

Unless they find it normal, like in Luxembourg, that a tribunal/a judge should receive "extra financing" from a litigant, an auditor receive "extra financing" from an auditee, a commission tenders receive "extra financing" from a tender, a City Hall/Mayor receive "extra financing" from a citizen who may ask for a builing permit...