By MaltaMedia News
Oct 26, 2007 - 6:47:11 PM
The task of fighting money laundering is becoming more difficult for banks due to the increasing complexity of the financial markets in which they operate. As a result the cost of fighting money laundering has risen dramatically across the world as banks have become increasingly engaged in the struggle against criminality.
These are some of the findings of the Global AML survey conducted by KPMG among 224 leading banks from 55 countries, which included 25% of the top 250 banks.
The Survey is an update on the first survey which was first issued in 2004 and finds that banks’ spending on anti-money laundering (AML) has increased by an average of 58% over the last three years.
KPMG also reports that senior management is getting increasingly involved in AML, with 71% of banks saying that directors at the highest level are participating in the implementation of its policies. An impressive 85 % of banks have a global AML policy, however there is a growing element of concern amongst banks that governmental and international regulation needs to be more effectively targeted, better focused and substantiated in order to better combat money laundering.
Despite state-of –the-art monitoring technology, an overwhelming 97% of banks admit their dependence on the vigilance of staff to monitor and identify suspicious activity, and a third of the banks surveyed stated their lack of satisfaction with the effectiveness of their current transactions monitoring systems.
On a more positive note, greater spending and training has led to an increase in the number of suspicious activity reports (SARs) being generated within over 70% of the banks. Banks are also making a greater effort in identifying Politically Exposed Persons (PEPs), who could be the conduits of money laundering. Over seven out of ten banks carry out due diligence procedures on PEPs, a substantial increase from the worrying 45% in the 2004 survey.
Karen Briggs Global Head of Anti-Money Laundering at KPMG who was a speaker at the KPMG Malta Financial Services Conference last May, said “Banks are clearly continuing to make increased efforts to tackle the money laundering threat effectively. These efforts are considerable, but nevertheless many banks are struggling to design and implement an effective anti-money laundering strategy. Significant numbers say that the regulatory environment is not helping them as well as it should do – this is clearly a matter of concern, as effective coordination between parties is one of the keys to defeating money launderers.
“With international banks bolstering their presence in emerging market economies, and with a low interest rate environment driving growth in alternative assets including hedge funds, private equity and commodity investments, the need for more stringent anti-money laundering processes has only grown. Banks will need to work extremely hard from here if they are to maintain any advantage in the war against money laundering and terrorist financing.”
The KPMG Report also highlights the incremental risks brought about by EU enlargement. The Report states that most of the ten plus two countries recently joining the EU did not historically have strict AML processes in place, and hence are not up to date with the rigorous standards required by the Third Money Laundering Directive.
Juanita Bencini, Partner, Regulatory and Compliance Advisory Services at KPMG Malta, states that “Locally, we are expecting regulatory pressure to have proper AML procedures in place to increase over the next few years There is much that is relevant to local banks in this Survey, since it covers a host of issues all of which need to be addressed once the EU Third Money Laundering Directive is transposed into our legislation. It also serves as a benchmark for local banks to assess where they are with their AML procedures vis-à-vis their peers in other jurisdictions.”
The Survey was launched in Malta at the recent session of the KPMG AML Roundtable, an AML forum for senior management and MLROs which was held on Thursday. Copies of the publication can be obtained by contacting Katia Mifsud Bons at katiamifsudbons@kpmg.com.mt.
© Copyright 2007 by MaltaMedia.com
http://www.maltamedia.com/artman2/publish/financial/article_3884.shtml
Showing posts with label Malta. Show all posts
Showing posts with label Malta. Show all posts
on Saturday, May 5, 2012
BRUSSELS, June 5 (Reuters) - Fifteen European Union states including financial centres Germany and France have been given a final warning for failing to update their rules aimed at choking off finance for terrorist activities, the bloc's executive said.
"If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice," the European Commission said in a statement on Thursday.
EU countries were obliged to introduce an updated version of the bloc's anti-moneylaundering rules by December last year.
The warnings were sent to Belgium, the Czech Republic, Germany, Greece, Spain, Finland, France, Ireland, Luxembourg, Malta, the Netherlands, Poland, Portugal, Sweden and Slovakia.
The rules apply to the financial sector, lawyers, notaries, accountants, real estate agents, casinos, trusts and company service providers.
The scope also extends to all providers of goods when payments are made in cash over 15,000 euros ($23,140).
Under the rules, a company would have to identify and verify who they are dealing with, report suspicions of moneylaundering or terrorist financing to the public authorities, and ensure personnel are properly trained.
http://www.finance.cz/zpravy/finance/171673-update-1-eu-targets-15-states-over-moneylaundering-rules/
"If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice," the European Commission said in a statement on Thursday.
EU countries were obliged to introduce an updated version of the bloc's anti-moneylaundering rules by December last year.
The warnings were sent to Belgium, the Czech Republic, Germany, Greece, Spain, Finland, France, Ireland, Luxembourg, Malta, the Netherlands, Poland, Portugal, Sweden and Slovakia.
The rules apply to the financial sector, lawyers, notaries, accountants, real estate agents, casinos, trusts and company service providers.
The scope also extends to all providers of goods when payments are made in cash over 15,000 euros ($23,140).
Under the rules, a company would have to identify and verify who they are dealing with, report suspicions of moneylaundering or terrorist financing to the public authorities, and ensure personnel are properly trained.
http://www.finance.cz/zpravy/finance/171673-update-1-eu-targets-15-states-over-moneylaundering-rules/
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on Friday, March 30, 2007
Thirty-four year-old Maria Abela of Gzira was sentenced to six years imprisonment after she admitted her involvement in the money laundering of 164,000USD, equivalent to around Lm53,000.
The court heard the accused admitting that in May 2004, she went to a Bank of Valletta branch to receive 164,000USD in her company's bank account, Alasram Holdings Limited. She also admitted to trading fraudulent merchandise and to falsifying large amounts of money into other bank accounts.
A number of other companies, all properties of Antonio Monaco from Italy, were also involved in these illegalities to the detriment the Swiss companies Jeric Holding, Holmus Mohsen Esadeh, Frank Marchan and Lecshof Finance.
Although Abela pleaded guilty, she told the court that when she initially entered into business, what she believed that this was a legitimate venture. Once she found out its illegality, she did not report the matter to the authorities because she had been threatened.
The woman was defended by Martin Fenech.
http://www.di-ve.com/dive/portal/portal.jhtml?id=273373&pid=1
The court heard the accused admitting that in May 2004, she went to a Bank of Valletta branch to receive 164,000USD in her company's bank account, Alasram Holdings Limited. She also admitted to trading fraudulent merchandise and to falsifying large amounts of money into other bank accounts.
A number of other companies, all properties of Antonio Monaco from Italy, were also involved in these illegalities to the detriment the Swiss companies Jeric Holding, Holmus Mohsen Esadeh, Frank Marchan and Lecshof Finance.
Although Abela pleaded guilty, she told the court that when she initially entered into business, what she believed that this was a legitimate venture. Once she found out its illegality, she did not report the matter to the authorities because she had been threatened.
The woman was defended by Martin Fenech.
http://www.di-ve.com/dive/portal/portal.jhtml?id=273373&pid=1
on Wednesday, March 28, 2007
In the first case of money laundering to be heard in the Criminal Court, yesterday morning a woman who was due to stand trial on charges of involvement in the laundering of about Lm71,000, admitted the charges brought against her.
However, according to presiding judge Mr Justice Joseph Galea Debono, the relatively new legislation on money laundering was rather ambiguous and it was very difficult for the court to apply the law, particularly since this is the first such case to be heard in the Criminal Court.
The law states that anyone found guilty of this crime could be jailed for up to 14 years, or fined a maximum of Lm1 million.
Maria Abela, 35, from Gzira, pleaded guilty to her involvement in the crime between January 2002 and 2004.
She is also charged with the falsification of documents and transactions for the purposes of money laundering.
According to the bill of indictment, the accused received an amount of money through Bank of Valletta in May 2004. This money was transferred into an account in the accused’s name, on behalf of Alasram Holdings Limited (by means of which Ms Abela was involved in the import and export of merchandise).
The police had also found that fraudulent transactions through the named bank account, as well as others, dated back to at least January 2002.
Police investigations showed that Ms Abela, together with a number of foreigners, was involved in illegal money transactions, carried out by means of falsified documents, to the detriment of a number of Swiss companies, including, but not only, Jeric Holding, Holmus Mohsen Esadeh, Frank Marchan and Lecshof Finance.
Ms Abela was allegedly paid 10 per cent of the total amount of money that was transferred into her account, but her lawyer argued that she had had to use this money to pay expenses incurred by the foreigners, since they had said they were going to open a company in Malta.
While the prosecution argued that the reputation of the country’s financial institutions had to be protected, defence lawyer Martin Fenech insisted that the punishment should be commensurate with the amount of money involved, “which was not such a huge amount”.
Other cases of money laundering involved millions of liri and, in any case, Ms Abela was not the main player in this crime, said Dr Fenech.
The case was deferred for judgement until tomorrow.
Mr Justice Joseph Galea Debono is presiding over the case. Assistant Attorney General Anthony Barbara is prosecuting and legal aid Martin Fenech is appearing for the accused.
http://www.independent.com.mt/news.asp?newsitemid=48605
However, according to presiding judge Mr Justice Joseph Galea Debono, the relatively new legislation on money laundering was rather ambiguous and it was very difficult for the court to apply the law, particularly since this is the first such case to be heard in the Criminal Court.
The law states that anyone found guilty of this crime could be jailed for up to 14 years, or fined a maximum of Lm1 million.
Maria Abela, 35, from Gzira, pleaded guilty to her involvement in the crime between January 2002 and 2004.
She is also charged with the falsification of documents and transactions for the purposes of money laundering.
According to the bill of indictment, the accused received an amount of money through Bank of Valletta in May 2004. This money was transferred into an account in the accused’s name, on behalf of Alasram Holdings Limited (by means of which Ms Abela was involved in the import and export of merchandise).
The police had also found that fraudulent transactions through the named bank account, as well as others, dated back to at least January 2002.
Police investigations showed that Ms Abela, together with a number of foreigners, was involved in illegal money transactions, carried out by means of falsified documents, to the detriment of a number of Swiss companies, including, but not only, Jeric Holding, Holmus Mohsen Esadeh, Frank Marchan and Lecshof Finance.
Ms Abela was allegedly paid 10 per cent of the total amount of money that was transferred into her account, but her lawyer argued that she had had to use this money to pay expenses incurred by the foreigners, since they had said they were going to open a company in Malta.
While the prosecution argued that the reputation of the country’s financial institutions had to be protected, defence lawyer Martin Fenech insisted that the punishment should be commensurate with the amount of money involved, “which was not such a huge amount”.
Other cases of money laundering involved millions of liri and, in any case, Ms Abela was not the main player in this crime, said Dr Fenech.
The case was deferred for judgement until tomorrow.
Mr Justice Joseph Galea Debono is presiding over the case. Assistant Attorney General Anthony Barbara is prosecuting and legal aid Martin Fenech is appearing for the accused.
http://www.independent.com.mt/news.asp?newsitemid=48605
on Monday, January 22, 2007
by FRANCESCA VELLA
Three men and a woman are being accused with money laundering through Italian channels by means of funds in the form of two bank drafts amounting to almost £1.4m.
The Court of Magistrates heard Police Superintendent Alexandra Mamo and court expert Martin Bajada explain the outcome of a five-year inquiry in the compilation of evidence against the four accused.
Two of the accused were allegedly directly involved in the money-laundering process, while the other two are a former employee of a local bank and an official of a stockbrokerage.
They are all pleading not guilty to money-laundering charges by means of two bank drafts for £411,740 and £959,530.78 respectively.
Magistrate Lawrence Quintano heard the results of a lengthy inquiry that started in October 2001, following a request from the Italian authorities.
The Maltese authorities had received letters rogatory that included a list of companies based in Malta that could have been involved in a carousel fraud case in Italy.
Superintendent Mamo explained how the Attorney General ordered the seizure of all the companies mentioned in the letters rogatory in August 2001.
Short after, on 18 October 2001 Magistrate Jacqueline Padovani opened an inquiry into the case and searches were carried out in properties related to two of the accused.
A number of documents related to the case, bank transaction documents and computer hard disks were found in the searches, stated Superintendent Mamo, adding that the documents indicated that money was transferred from Italian companies and deposited at a local bank and stockbroker in money-laundering operations.
The court expert, who was interrupted by the defence several times since it questioned the way in which the investigation of the documents was carried out, said the documents under scrutiny showed that in the case of the first bank draft – that for £411,740, an attempt was made to transfer funds from one local bank to another.
When the second bank refused to accept to open an account under the name of the company in question, the funds were never returned to the first bank. Instead, this bank issued a bank draft for £411,740 on the name of a particular company.
Mr Bajada went on to explain that the same bank issued another bank draft for £959,530.78 under the name of another company.
The two drafts then ended up at a local stockbrokerage; a substantial amount of the funds were deposited at an offshore bank in Malta, while the rest were distributed among different people by one of the accused.
The court ordered a ban on the names of the accused. As a result, no company names are being mentioned in order not to reveal the identity of the accused in any way.
The case has been deferred to 7 March.
Police Inspector Antonovich Muscat is prosecuting. Dr Joseph Giglio, Dr Martin Fenech, Dr Robert Abela and Dr Emanuel Mallia are defence counsel.
http://www.independent.com.mt/news.asp?newsitemid=45018
Three men and a woman are being accused with money laundering through Italian channels by means of funds in the form of two bank drafts amounting to almost £1.4m.
The Court of Magistrates heard Police Superintendent Alexandra Mamo and court expert Martin Bajada explain the outcome of a five-year inquiry in the compilation of evidence against the four accused.
Two of the accused were allegedly directly involved in the money-laundering process, while the other two are a former employee of a local bank and an official of a stockbrokerage.
They are all pleading not guilty to money-laundering charges by means of two bank drafts for £411,740 and £959,530.78 respectively.
Magistrate Lawrence Quintano heard the results of a lengthy inquiry that started in October 2001, following a request from the Italian authorities.
The Maltese authorities had received letters rogatory that included a list of companies based in Malta that could have been involved in a carousel fraud case in Italy.
Superintendent Mamo explained how the Attorney General ordered the seizure of all the companies mentioned in the letters rogatory in August 2001.
Short after, on 18 October 2001 Magistrate Jacqueline Padovani opened an inquiry into the case and searches were carried out in properties related to two of the accused.
A number of documents related to the case, bank transaction documents and computer hard disks were found in the searches, stated Superintendent Mamo, adding that the documents indicated that money was transferred from Italian companies and deposited at a local bank and stockbroker in money-laundering operations.
The court expert, who was interrupted by the defence several times since it questioned the way in which the investigation of the documents was carried out, said the documents under scrutiny showed that in the case of the first bank draft – that for £411,740, an attempt was made to transfer funds from one local bank to another.
When the second bank refused to accept to open an account under the name of the company in question, the funds were never returned to the first bank. Instead, this bank issued a bank draft for £411,740 on the name of a particular company.
Mr Bajada went on to explain that the same bank issued another bank draft for £959,530.78 under the name of another company.
The two drafts then ended up at a local stockbrokerage; a substantial amount of the funds were deposited at an offshore bank in Malta, while the rest were distributed among different people by one of the accused.
The court ordered a ban on the names of the accused. As a result, no company names are being mentioned in order not to reveal the identity of the accused in any way.
The case has been deferred to 7 March.
Police Inspector Antonovich Muscat is prosecuting. Dr Joseph Giglio, Dr Martin Fenech, Dr Robert Abela and Dr Emanuel Mallia are defence counsel.
http://www.independent.com.mt/news.asp?newsitemid=45018
By MaltaMedia News
Jan 20, 2007 - 8:32:46 PM
The Court has banned the publication of the names of four Maltese defendants in a money laundering case. Following a five-year magisterial inquiry, the three men and one woman were charged on Friday with what has been dubbed the ‘Carousel fraud case’.
The Court heard how Lm900,000 were transferred from Italy into Maltese bank accounts, changed into two bank drafts and distributed through a brokerage.
The woman is a secretary and a representative of several companies and the three men are a company director, a former bank branch manager and a brokerage director. Names of banks and companies are not being published as they may throw light on the identity of the accused, which the court presided by Magistrate Lawrence Quintano has decreed should not be divulged.
Investigations started back in 2001 when the Italian authorities asked the Maltese authorities for their help in investigating the case. The Italian authorities listed a number of Maltese companies they believed may have been involved in the fraud. In August 2001, the Maltese courts issued an order allowing the investigation of the companies listed and the seizure of any relevant documents.
The money circulated from one bank to another and from one company to another thanks to the positions held by the four accused. Two bank drafts, one for about Lm269, 480 and another for about Lm629, 380 were involved.
Police Inspector Antonovich Muscat is prosecuting.
Lawyers Joseph Giglio, Martin Fenech, Robert Abela and Emmanuel Mallia are appearing for the accused.
Meanwhile, the Journalists' Committee has strongly objected to the ban on publication of the names of the four defendants and the companies and banks involved in the Carousel fraud case.
Journalists' Committee chairperson Karl Schembri said in a press release, "The decision to shield the names of both defendants and other financial institutions through a ban on their publication constitutes a disregard for journalists' duty to inform the general public of such an important criminal investigation.”
It also serves to reinforce the general notion that financial institutions, companies and their employees or directors can enjoy a privileged ban on the publication of their identity. This goes against the public's right to know and see that justice is being carried out transparently, and goes against the courts' own practice in other criminal procedures, Mr Schembri said.
Such bans should be limited only to protecting the identity of minors and vulnerable victims, Mr Schembri concluded.
© Copyright 2007 by MaltaMedia.com
http://www.maltamedia.com/artman2/publish/law_order/printer_275.shtml
Jan 20, 2007 - 8:32:46 PM
The Court has banned the publication of the names of four Maltese defendants in a money laundering case. Following a five-year magisterial inquiry, the three men and one woman were charged on Friday with what has been dubbed the ‘Carousel fraud case’.
The Court heard how Lm900,000 were transferred from Italy into Maltese bank accounts, changed into two bank drafts and distributed through a brokerage.
The woman is a secretary and a representative of several companies and the three men are a company director, a former bank branch manager and a brokerage director. Names of banks and companies are not being published as they may throw light on the identity of the accused, which the court presided by Magistrate Lawrence Quintano has decreed should not be divulged.
Investigations started back in 2001 when the Italian authorities asked the Maltese authorities for their help in investigating the case. The Italian authorities listed a number of Maltese companies they believed may have been involved in the fraud. In August 2001, the Maltese courts issued an order allowing the investigation of the companies listed and the seizure of any relevant documents.
The money circulated from one bank to another and from one company to another thanks to the positions held by the four accused. Two bank drafts, one for about Lm269, 480 and another for about Lm629, 380 were involved.
Police Inspector Antonovich Muscat is prosecuting.
Lawyers Joseph Giglio, Martin Fenech, Robert Abela and Emmanuel Mallia are appearing for the accused.
Meanwhile, the Journalists' Committee has strongly objected to the ban on publication of the names of the four defendants and the companies and banks involved in the Carousel fraud case.
Journalists' Committee chairperson Karl Schembri said in a press release, "The decision to shield the names of both defendants and other financial institutions through a ban on their publication constitutes a disregard for journalists' duty to inform the general public of such an important criminal investigation.”
It also serves to reinforce the general notion that financial institutions, companies and their employees or directors can enjoy a privileged ban on the publication of their identity. This goes against the public's right to know and see that justice is being carried out transparently, and goes against the courts' own practice in other criminal procedures, Mr Schembri said.
Such bans should be limited only to protecting the identity of minors and vulnerable victims, Mr Schembri concluded.
© Copyright 2007 by MaltaMedia.com
http://www.maltamedia.com/artman2/publish/law_order/printer_275.shtml
on Wednesday, December 20, 2006
Godwin Spiteri 41, from Birgu and his brother Antoine, 29 residing in Marsascala, have been arraigned in front of magistrate Silvio Meli and charged with trafficking cocaine and money laundering. It is understood that in their Birgu residence the authorities also found Lm 17,000 in cash which are believed to have come from the drug trafficking operation.
The Spiteri brothers pleaded not guilty to the charges brought against them.
They were arrested on Tuesday afternoon in Birgu after being allegedly found in possession of heroin. The two were remanded into custody at the Corradino prisons.
Godwin, the elder brother, was also accused of having a fire arm and munitions without the appropriate Police Licence and also with being a relapser.
Antoine Spiteri, the younger brother is accused of being in possession of cocaine within less than 100 meters from a school.
The court has denied the accused bail and ordered that they be detained at the Corradino prisons.
Police inspectors Pierre Grech and Victor Aquilina are leading the prosecution while lawyers Robert Abela and Franco Debono are defence counsels.
http://www.maltastar.com/pages/msFullArt.asp?an=8583
The Spiteri brothers pleaded not guilty to the charges brought against them.
They were arrested on Tuesday afternoon in Birgu after being allegedly found in possession of heroin. The two were remanded into custody at the Corradino prisons.
Godwin, the elder brother, was also accused of having a fire arm and munitions without the appropriate Police Licence and also with being a relapser.
Antoine Spiteri, the younger brother is accused of being in possession of cocaine within less than 100 meters from a school.
The court has denied the accused bail and ordered that they be detained at the Corradino prisons.
Police inspectors Pierre Grech and Victor Aquilina are leading the prosecution while lawyers Robert Abela and Franco Debono are defence counsels.
http://www.maltastar.com/pages/msFullArt.asp?an=8583
James Debono
A dramatic increase in the number of apartments, accompanied by skyrocketing prices, has confirmed claims by economist Edward Scicluna that black money is being washed in the Maltese property market.
The number of housing units constructed increased by 35% in 2005, from 6,700 to 9,000, and despite the increase, prices skyrocketed by 40% since 2003 for apartments, and by 35% for two-bedroom maisonettes.
The figures, featured in the Building Consultative Council’s annual report, also revealed that the number of apartments had jumped from 5,265 in 2004 to 7,539 in 2005 – an increase of 43 per cent.
Overall, the increase of over 2,300 units in just one year is comparable to the gradual increase between 2000 and 2004 of 2,500 units.
Edward Scicluna told MaltaToday the property inflationary explosion was like “a fire”.
“One might disagree with what actually started it, but definitely it will only persist if it is generously fuelled. In the economy that fuel is always excess money. In the present context what is fuelling the present property inflationary spiral is the excess liquidity of Maltese currency in circulation seeking back-door conversion into Euro.”
Scicluna had already warned in October that as the date for the euro changeover approaches, more people will channel their undeclared monies into legitimate activities like property development.
“These monies are now fuelling the current inflationary pressures, blowing up further the property bubble and encouraging property speculation, with its needless environmental damage and destruction of our towns and village cores, and leading to downward pressures on the Maltese Lira.”
Data compiled by Scicluna shows that Malta has the highest amount of money in circulation per capita among the 12 new EU member states – an astounding EUR2,912 (Lm1,250) per person.
Since 1999, the amount of money in circulation has increased at an average rate of Lm17 million per annum, despite a period of economic sluggishness during the same period.
But since last year Malta registered a first ever decrease of about Lm10 million. Scicluna estimates that this break in trend indicates that about Lm30 million have already been withdrawn.
Those who are hiding their money “under the mattress”, will surely not be taking cash to financial institutions to exchange it for euros. By law, credit institutions are obliged to enquire on “the provenance of any amount of any sum in excess of Lm5,000”. Banks are also obliged to enquire on the origins of series of structured transactions below Lm5,000.
Social cost
Most of the development occurring in 2005 has taken place in already developed residential areas. The conversion and redevelopment of old buildings resulted in an increase of 4,577 new units in 2005 compared to just 645 units created in 2001.
While alleviating some of the pressures on the countryside, the intensification of construction in already built-up areas is creating havoc in village cores for residents living in once tranquil residential areas.
Environment Minister George Pullicino has already announced plans to ‘discipline’ developers with the introduction of new construction regulations. Flimkien ghal Ambjent Ahjar, the environmental lobby, welcomed Pullicino’s declaration.
“If carried through, this will be a move in the right direction and a relief for many citizens, as the exaggerated and uncontrolled development taking place in many parts of the islands is subjecting the Maltese public to incessant noise, dust and dirt, much of which could be avoided by investment in equipment which has now become available,” the FAA said in a statement issued on Tuesday.
But according to the FAA much of the new development is not necessary and damaging Malta’s image, heritage and public health. It urged government to implement programmes to encourage the restoration of treasured old buildings and the reform of outdated rent laws.
http://www.maltatoday.com.mt/2006/12/17/t1.html
A dramatic increase in the number of apartments, accompanied by skyrocketing prices, has confirmed claims by economist Edward Scicluna that black money is being washed in the Maltese property market.
The number of housing units constructed increased by 35% in 2005, from 6,700 to 9,000, and despite the increase, prices skyrocketed by 40% since 2003 for apartments, and by 35% for two-bedroom maisonettes.
The figures, featured in the Building Consultative Council’s annual report, also revealed that the number of apartments had jumped from 5,265 in 2004 to 7,539 in 2005 – an increase of 43 per cent.
Overall, the increase of over 2,300 units in just one year is comparable to the gradual increase between 2000 and 2004 of 2,500 units.
Edward Scicluna told MaltaToday the property inflationary explosion was like “a fire”.
“One might disagree with what actually started it, but definitely it will only persist if it is generously fuelled. In the economy that fuel is always excess money. In the present context what is fuelling the present property inflationary spiral is the excess liquidity of Maltese currency in circulation seeking back-door conversion into Euro.”
Scicluna had already warned in October that as the date for the euro changeover approaches, more people will channel their undeclared monies into legitimate activities like property development.
“These monies are now fuelling the current inflationary pressures, blowing up further the property bubble and encouraging property speculation, with its needless environmental damage and destruction of our towns and village cores, and leading to downward pressures on the Maltese Lira.”
Data compiled by Scicluna shows that Malta has the highest amount of money in circulation per capita among the 12 new EU member states – an astounding EUR2,912 (Lm1,250) per person.
Since 1999, the amount of money in circulation has increased at an average rate of Lm17 million per annum, despite a period of economic sluggishness during the same period.
But since last year Malta registered a first ever decrease of about Lm10 million. Scicluna estimates that this break in trend indicates that about Lm30 million have already been withdrawn.
Those who are hiding their money “under the mattress”, will surely not be taking cash to financial institutions to exchange it for euros. By law, credit institutions are obliged to enquire on “the provenance of any amount of any sum in excess of Lm5,000”. Banks are also obliged to enquire on the origins of series of structured transactions below Lm5,000.
Social cost
Most of the development occurring in 2005 has taken place in already developed residential areas. The conversion and redevelopment of old buildings resulted in an increase of 4,577 new units in 2005 compared to just 645 units created in 2001.
While alleviating some of the pressures on the countryside, the intensification of construction in already built-up areas is creating havoc in village cores for residents living in once tranquil residential areas.
Environment Minister George Pullicino has already announced plans to ‘discipline’ developers with the introduction of new construction regulations. Flimkien ghal Ambjent Ahjar, the environmental lobby, welcomed Pullicino’s declaration.
“If carried through, this will be a move in the right direction and a relief for many citizens, as the exaggerated and uncontrolled development taking place in many parts of the islands is subjecting the Maltese public to incessant noise, dust and dirt, much of which could be avoided by investment in equipment which has now become available,” the FAA said in a statement issued on Tuesday.
But according to the FAA much of the new development is not necessary and damaging Malta’s image, heritage and public health. It urged government to implement programmes to encourage the restoration of treasured old buildings and the reform of outdated rent laws.
http://www.maltatoday.com.mt/2006/12/17/t1.html
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