Malta’s role in the international fight against money laundering
| Pages | 263-270 |
| Published date | 01 July 2005 |
| DOI | https://doi.org/10.1108/13685200510620984 |
| Date | 01 July 2005 |
| Author | Robert Vella‐Baldacchino |
| Subject Matter | Accounting & finance |
Malta's Role in the International Fight
Against Money Laundering
Robert Vella-Baldacchino
MALTA IN PERSPECTIVE
Malta is among the group of ten states that only
recently, on 1st May, 2004, has joined the European
Union, now transformed into the largest political
and trading bloc in the world. With a total population
of about 400,000 persons, roughly the same size as that
of the population of Luxembourg, one of the found-
ing European Community member states, but with
the smallest land area among all the EU member
states, only 316 square kilometres (just over 123
square miles), it has by far the largest population den-
sity in the EU, with an estimated 1,250 persons per
square kilometre, which is estimated as the seventh lar-
gest population density in the world.After Malta, the
Netherlands has the second largest population density
in the EU with just 393 persons per square kilometre
while the EU population density average is estimated
at 116.4 persons per square kilometre.
From an economic perspective, Malta boasts a
favourable geographic location and a productive
labour force. The economy is dependent on foreign
trade, manufacturing (especially electronics and tex-
tiles) and tourism. According to 2003 data, Malta's
gross domestic product based on purchasing power
parity calculations (involving the use of standardised
international dollar price weights, which are applied
to the quantities of ®nal goods and services pro-
duced) Ð amounted to US$7.082bn representing
a gross domestic product on purchasing power
parity calculations (GDP (PPP)) per capita of
US$17,700.
A comparison of Malta's GDP (PPP) and gross
national income on purchasing power parity calcu-
lations (GNI (PPP))/per capita (2003 data) with
those of the remaining EU 24 member states can be
seen in Figures 1 and 2.
THE MALTA STOCK EXCHANGE
The Malta Stock Exchange (MSE) was set up in 1990
as a statutory public corporation in terms of s. 24(1) of
the Financial Markets Act (Cap. 345 of the Laws of
Malta) and commenced trading operations in 1992.
In virtue of amendments to the Financial Markets
Act passed in 2002, the Malta Financial Services Auth-
ority (MFSA) issued a Recognition Order to the MSE
to operate as a Recognised Investment Exchange in
terms of s. 24(2) of the Act. The MSE's principal
business consists in providing ecient, transparent
and reliable facilities for dealing in listed securities as
well as securities clearance, settlement, custody and
administration services through its in-house Central
Securities Depository (CSD). Since 2003, the MSE
no longer determines applications for admissibility
to listing of an issue of securities. Such discretion is
by law reserved to the MFSA as the competent Listing
Authority under the Financial Markets Act. Further-
more the MFSA now also licenses and supervises
stockbrokers eecting securities dealing as members
of the MSE.
In its brief lifespan, the MSE Share Index in line
with other stock indexes in various established and
emerging markets reached its staggering high in the
®rst quarter of the turn of this millennium only to
tumble soon after. As can be deduced from the
graph reproduced hereunder the MSE Share Index
stabilised around August 2002 and has since steadily
been gradually picking up again thereafter, as illus-
trated in Figure 3.
Currently the MSE Ocial List includes 12 equities,
26 corporate bonds, 43 Malta Government Treasury
stocks, 1 international organisation debt instrument,
68 collective investment scheme primary listings and
319 collective investment scheme secondary listings.
The Alternative Companies List for new start-
up companies includes 1 equity and 3 corporate
bonds. Stock market capitalisation (excluding collec-
tive investment schemes products) amounted to
LM2.06bn as at 31st July, 2004 (about US$5.838bn)
made up of LM0.832bn of equity, LM0.190bn of cor-
porate debt and LM1.037bn of Maltese government
debt.
Upon admission to listing and trading on the MSE,
the CSD acquires a complete register of holders of the
listed securities. The CSD's information system is
organised as a large database and is mainly set up in
such a way as to identify individual holdings by issue
that can be readily accessed by authorised ocials.
Page 263
Journal of Money Laundering Control Ð Vol. 8 No. 3
Journalof Money Laundering Control
Vol.8, No. 3, 2005, pp. 263± 270
#HenryStewart Publications
ISSN1368-5201
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