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Malta Leaves Offshore Banking Organisation

Lisa Ugur, Tax-news.com, London

19 June 2000

Last week the Governor of the Central Bank of Malta and the chairman of Malta Financial Services Centre announced that Malta has withdrawn from the Offshore Group of Banking Supervisors (OGBS), as part of a strategy to bring the island's banking supervision more into line with international standards.

Finance Minister John Dalli stated that membership of the OGBS was no longer appropriate for Malta and said 'Coming out of the OGBS is simply another step in the process begun in 1994 of Malta disengaging itself from offshore licences and the few remaining licences will terminate on schedule. There is now no logical reason for Malta to retain its OGBS membership. Malta's application to join the European Union is progressing well and increasingly our banking and regulatory relationships will be with the European Union and authoritative international bodies such as the OECD and the Basle Committee on Banking Supervision.'

Malta has been endeavouring to disassociate itself from the traditional image of an offshore financial centre for some years. In 1994 the country introduced legislation to phase out the island's offshore operations and brought its finance sector legislation and regulations more in line with the EU model. It has also developed and implemented fiscal policies that retain the island's attractiveness to investors while supporting international efforts to maintain global financial stability.

All the offshore centres are waiting - some more anxiously than others - for the impending publication of the report by the Organisation for Economic Cooperation and Development (OECD), which is expected to 'blacklist' some jurisdictions which are deemed to have failed to co-operate on issues such as transparency. Malta appears to have no such fears, the general consensus being that the island will fare well in the report, given its attempts to disengage from its long-time image, despite having been placed in the second category of the Financial Stability Forum's recent report on international financial centres.

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