The Malta Business Observer, 21st November 2019

NEWS

Issue 104

Distributed with Times of Malta

| November 21, 2019

Local medical cannabis companies finding banking solutions outside Malta

e Malta Business Observer interviews Lufthansa Technik Malta CEO, Marcus Motschenbacher, on the growth of the firm’s operations here in Malta. see pages 5, 6 >

Helena Grech Some medical cannabis companies in the process of getting licensed in Malta have solved their banking issues by turning to overseas banks, while Malta Enterprise CEO Kurt Farrugia reveals that three local banks are “positively considering” whether to allow the industry into their risk appetites.

Earlier in November, BOV CEO Mario Mallia announced that, in line with regulators’ demands and a lack of expertise within the bank, it would not be accepting to service medical cannabis companies as the industry falls outside its risk appetite. Medical cannabis was officially legalised in Malta in March 2018, with Malta Enterprise in charge of overseeing the licensing process.

Asked whether the banking situation has been a concern for Malta Enterprise, Mr Farrugia was cautiously optimistic, as companies “are finding other solutions”. He added that “some companies are using banks in Spain and Germany; big banks which are established.”

In comments to The Malta Business Observer, Mr Farrugia explained that Malta Enterprise undertook an exercise whereby it communicated with all banks in Malta, as well as a number of international financial institutions, about the medical cannabis industry locally and the licensing process involved.

He said that an overview was given to the banks detailing due diligence and business plan scrutiny by Malta Enterprise on each applicant company. To apply, firms need to submit details regarding company structure and the Ultimate Beneficial Own-

NEWS With Malta’s one-year transitory period for the blockchain sector having recently come to an end, Parliamentary Secretary for the Digital Economy, Financial Services and Innovation, Silvio Schembri, counters claims of slow activity in the sector. see pages 9, 13 >

TRANSPORT

ership (UBO) of shareholding.

Following this, aspiring companies must seek out an EU Good Manufacturing Practice (GMP) certification.

Furthermore, aspiring companies must be GMP certified in the country where the company was originally set up. In addition, the raw materials imported for production in that country – in this case, Malta – must also be EU GMP and Good Agricultural Practice (GAP) certified.

Mr Farrugia highlighted that Malta Enterprise’s goal in meeting with the banks was to share knowledge about the industry and fight any misconceptions that may exist.

Currently, there are 24 medical cannabis companies that hold a Letter of Intent by Malta Enterprise – out of 50 applicants – with six at a very advanced stage.

“We met each and every bank and provided an overview of the whole spectrum of companies that we have approved by issuing a Letter of Intent, and made a specific case for the medical cannabis industry in general. We aimed to share knowledge on the industry, the way it is developing

and that, at the end of it all, these aren’t companies operating in the entertainment industry. These are not recreational drugs, but products used for medical purposes, produced by pharmaceutical companies that employ continued on page 3

Car sharing platform, GoTo announces its transformation into a multi-vehicle platform, with the launch of its new scooter service in the first half of December. see pages 18, 19 >

STOCK MARKET REVIEW Edward Rizzo, director at Rizzo, Farrugia & Co (Stockbrokers) Limited, reviews the published Interim Directors’ Statements of some of Malta’s leading companies. see pages 22, 23 >

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Malta Enterprise CEO calls for more research and development in medical cannabis sector continued from page 1 scientists, quality experts and medical doctors,” he underlined.

In an attempt to provide perspective, Mr Farrugia drew attention to Malta’s well-established pharmaceutical industry. “We produce active ingredients for cancer medication which are deadly – one drop could kill you.

The active ingredients for such medication are far more dangerous than a room-full of THC. The point in all this is that the danger with THC is not so significant when you consider what is being produced on the island,” he said.

Mr Farrugia stressed that the companies looking to set up in Malta are essentially pharmaceutical ones, going on to assert that, although “banks view pharmaceutical companies producing such cancer medication in a professional way, unfortunately, there is still the misconception that cannabis could be a problem, even for medicinal purposes.”

Asked about staffing issues with the regulator overseeing the licensing process, Mr Farrugia said that so far, he has not received complaints in this regard. Licensing is a long process and, therefore, there has not been a large number of vacancies being made in one instance.

Currently, there are 24 medical cannabis companies that hold a Letter of Intent by Malta Enterprise – out of 50 applicants – with six at a very advanced stage. Mr Farrugia said that the Government expects exports to start by the first quarter of 2020.

He explained that out of companies which have received a Letter of Intent, some are relatively young but are made up of experts within the industry. “We have

“ese are not recreational drugs, but products used for medical purposes, produced by pharmaceutical companies that employ scientists, quality experts and medical doctors.” – Kurt Farrugia, Malta Enterprise CEO been rejecting new companies to the industry, unless they have a very solid and experienced management team,” he stressed.

Asked what the most significant advantage and disadvantage is for a company seeking to operate in the medical cannabis space in Malta, Mr Farrugia – true to his nature – chose to begin with the positive.

“The fact that you have a onestop-shop, as a company inquiring to set up in Malta – where you have Malta Enterprise and the Medicines Authority working together throughout the process – is very positive. Also, the fact that the licence encompasses all business activity related to medical cannabis is also a big plus.”

Onto the negative, Mr Farrugia explained that the banking situation and scarce land resources remain the biggest challenge. He noted that the bank issues are a “positive challenge” with solutions in sight. With regard to the availability of space, companies currently have two options: they can have space allocated to them by the Government or rent out a space for the private sector.

Mr Farrugia said that after a company receives its Letter of Intent from Malta Enterprise, following the due diligence process, it must then identify a site and set up its laboratory and clean room.

After this, it can be GMP certified by the Medicines Authority.

Therefore, finding the right space is crucial.

MALTESE MEDICAL CANNABIS PATIENTS HAVE LITTLE TO CHOOSE FROM – DR ANDREW AGIUS, PAIN CLINIC Maltese medical cannabis patients have a grand total of four products from two brands to choose from, explained Dr Andrew Agius from the Pain Clinic, adding that one of the brands goes out of stock often.

“This leaves patients who are doing well without medicine for weeks,” he said. Dr Agius was the first doctor to stick his neck out in such a vocal way in favour of medical cannabis. His clinic treats patients suffering from chronic pain and he has noted their positive feedback with regards to medical cannabis. Often, such patients respond adversely to opium-based pain killers.

“All the products that are available contain THC and may not be suitable for everyone. Since there are no CBD-only products in pharmacies yet, patients still have to access these products from the unregulated online market,” he said.

Asked about whether the advent of medical cannabis companies setting up in Malta is expected to help local medical cannabis users, Dr Agius said that once it is produced locally, the price is expected to drop ”significantly” while the “number of products available is expected to increase”.

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Lufthansa Technik’s €25 million expansion underway – CEO Emma Mattei The recent signing of the agreement between Lufthansa Technik Malta and Malta Industrial Parks Ltd will enable Lufthansa Technik to expand its current facility by building an additional hangar that will be able to service a larger number of wide-bodied and narrow-bodied aircraft simultaneously, the company’s CEO said in comments to The Malta Business Observer.

The €25 million investment was instigated by the aviation masterplan of the Maltese Government seeking growth options for the aviation sector, and provides Lufthansa Technik with the opportunity to consolidate business in one building.

“Work is already underway,” said Marcus Motschenbacher, CEO of Lufthansa Technik Malta.

“The existing spaces occupied by Lufthansa Technik are currently separate and this masterplan provides the opportunity to consolidate business in one building, by extending the existing one. The secondary building will be closed only once the extension is complete, and working.”

The actual planning phase for the project has been completed, he underlined. “We have signed the agreements; we have gone through all the stages of approval, which include the local board, the group board and the investment board of the group,” the CEO continued.

“The designs are ready, and we have placed the application at the Planning Authority. We have also made some preparatory works on the site, clearing it and cleaning it.” The first level of excavations will take place before the end of

PHOTO: TYLER CALLEJA JACKSON

the year, “and then we go full blast ahead at the beginning of 2020,” said Mr Motschenbacher.

The estimated timeframe for the project to be complete is 18 months, and Mr Motschenbacher is confident that it will be fully operational by mid 2021. “It’s not just a swap. It is a redesign of our op-

erations. We are currently able to work on three transcontinental aircrafts, and, with the new hangar, we will be able to do four of them, with an additional five of the smaller aircrafts, such as the A320,” he explained.

The expansion is testament to Lufthansa Technik’s confidence in

the local aviation masterplan, as well as the local workforce, and will generate more high-quality jobs, he stressed. The outfit has been in Malta for 16 years, and Lufthansa Technik was a pioneer in the local aviation industry. “Before us, there was only Airmalta, so we were the first aviation company to put our

footprint here between 2002 and 2003,” said Mr Motschenbacher.

“Back then it was a good marriage. Germany was under pressure from its major customers in that it was becoming too expensive so we were looking for a continued on page 6

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NEWS

Extension to be fully operational by mid-2021 continued from page 5 more cost-attractive solution, and the business development arms in Malta were offering those attractive solutions.”

Mr Motschenbacher, who has been CEO since August 2016, also praised Malta’s geographic position; the good level of spoken English, and the genuine craftsmanship found locally. He explained that, for the expansion of Lufthansa Technik to be made possible, such intrinsic aspects needed to come together.

The CEO’s educational and work background stands him in good stead in this current role. He spent 18 years in Hamburg work-

ing at Lufthansa Technik’s headquarters before being posted to Malta. He has a joint Master’s degree in Business Administration and Mechanical Engineering from the Universities of Darmstadt and Berlin, in Germany, as well as a double diploma from Toulouse Business School. He has been employed with Lufthansa Technik since graduating just over 20 years ago.

“You fall in love with a location and you want it to flourish. You want it to grow. Does growth necessarily mean you build a hangar? Not necessarily. You can grow the size of the workforce; you can grow your customer portfolio; and product portfolio,”

said Mr Motschenbacher. “We decided to go for all of them together, because Malta has acquired a very good reputation, started by my predecessor and continued by myself.”

To conclude, Mr Motschenbacher commented that the new venture gives Lufthansa Technik the opportunity to have a strong, forward-looking, future-proof, major operation in Malta, and to further enhance an already attractive portfolio with a stable workforce and more possibilities for digital innovation. Moreover, it allows for the broadening of expertise on different aircraft and more sophisticated methodology within the workforce.

PHOTO: TYLER CALLEJA JACKSON

“It is a redesign of our operations. We are currently able to work on three transcontinental aircrafts, and, with the new hangar, we will be able to do four of them, with an additional five of the smaller aircrafts, such as the A320.” – Marcus Motschenbacher, CEO, Lufthansa Technik Malta

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Parliamentary Secretary counters claims of slow activity in blockchain sector, praising Malta’s “regulated environment” Helena Grech With Malta’s one-year transitory period for the blockchain sector having recently come to an end, Parliamentary Secretary for the Digital Economy, Financial Services and Innovation, Silvio Schembri, has praised Malta’s “regulated environment”, despite recent claims of slow activity in the sector.

“One has to bear in mind that we have come a long way, from a wild west scenario to regulation. Malta has managed to regulate the unregulated and we started by listening to the industry,” the Parliamentary Secretary said, in comments to The Malta Business Observer. “As a Government, we took their concerns on board, embraced this new technology and discussions were held with the concerned authorities and stakeholders until we presented the current laws, which are serving as a blueprint for countries yet to explore this sector.”

Yet, major Indian crypto-exchange ZebPay left Malta in September 2019 – after just 11 months on the island – without having yet been licensed by the MFSA. Crypto-exchange CGEX also ceased operations in Malta shortly before ZebPay. Neither company had a VFA service provider licence but were operating within a transitory period. A major concern for companies, it has been reported, was acquiring a bank account in Malta as cryptocurrency largely falls outside of the risk appetite of the island’s major banks.

This came off the back of legislation enacted on 1st November 2018, regulating Distributed Ledger Technology (DLT), and paving the way for operators in the space of innovative technologies, cryptocurrencies and Virtual Fi-

“One has to bear in mind that we have come a long way, from a wild west scenario to regulation. Malta has managed to regulate the unregulated.” – Parliamentary Secretary Silvio Schembri nancial Assets (VFA). As a result, the past 12 months saw an amplified level of excitement about Malta being the first country in the world to regulate DLT in such a robust way, with conferences and summits being well-attended and well-covered by the media.

Come 2019, the first VFA agents were certified, acting as a gateway between the MFSA and companies looking to apply to become service providers in the field. Moreover, under current legislation, VFA service providers have been allowed to benefit from a one-year transitory period – which closed on 31st October 2019 – during which they may operate without a licence, though they need to acquire one to continue operating.

However, the past few months have seen few firms acquire the necessary licences. To counter concerns, Mr Schembri underlined that

“earlier this month 34 prospective VFA service providers, 21 of which pertain to crypto-asset exchanges, have put forward their Letter of Intent to the concerned authorities.”

Indeed, an MFSA spokesperson said that Letters of Intent are “the first step in the authorisation process for such applicants to obtain a VFA Services Licence under the Act. The Authority has already started setting up preliminary meetings with the prospective VFA service providers. Once a preliminary meeting is held, each applicant will have 60 days to submit a full application pack to the MFSA,

after which the MFSA will be able to start the authorisation process.”

And, echoing the Parliamentary Secretary’s thoughts, when asked about future prospects for the blockchain industry in Malta, the MFSA spokesperson said that “in the next year we foresee a good number of licensed VFA service providers operating in or from Malta, which, in itself, may well attract more service providers to seek a licence under the VFA regulatory framework.”

Moreover, and in line with this, a spokesperson from the Malta Digital Innovation Authority

(MDIA) – the entity tasked with safeguarding Malta’s reputation in its use of Innovative Technological Arrangements (ITA), the software underlying DLT – said that it is “looking forward to the next 12 months”, stressing that the island was in a “strong position” to encourage growth in the sector.

The entity’s spokesperson said that the MDIA foresaw new Systems Auditors (SA) initiating the application process to become MDIA certified SAs, whose role it is to audit the ITA being procontinued on page 13

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e Malta Business Observer is Malta’s leading business newspaper distributed with Times of Malta every month.

Acting Managing Editor Rebecca Anastasi

EDITORIAL

Rising to the occasion?

In an attempt to replicate the success of the iGaming sector, much has been made in recent months of the supposed proliferation of two new industries: blockchain and the medical cannabis sector.

The future, we have been told, is bright, with new firms lining up to take advantage of the favourable business environment and legislative procedures.

In March 2018, medical cannabis was officially legalised, with the hope that this would open the doors to a spate of companies clamouring to set up shop on the island. And, later on, in the same year, in November, the Virtual Financial Assets (VFA) Act came into force. This was described by some as a “watershed moment”, with prospective companies able to operate without a licence for the first year, though the required paperwork would have to be submitted in line with the 31st October 2019 deadline.

However, since those auspicious beginnings – and slick PR campaigns promoting the sectors – there does not seem to have been the staggering torrent of firms moving to Malta, making it their jurisdiction of choice. Is that because the industries, themselves, are still figuring out their forms, processes and futures, not only in Malta, but on an international level? Or is it because the island has, somehow, failed to attract the interest we so wanted?

In this month’s edition of The Malta Business Observer, we ask these questions, and others, to sectorial representatives, authorities and stakeholders, to determine the state of the medical cannabis and blockchain sectors. Of course, we understand that these are still early days and it would also be unwise to generalise and speculate, since the

two sectors are not two sides of the same coin. Rather, they are evidence of the intent to diversify Malta’s offering and ensure the economy keeps on its buoyant trajectory.

Yet, as our stories show, the number of companies that have been granted Letters of Intent to start operations on the island are still low.

Currently, there are 24 medical cannabis companies that hold a Letter of Intent by Malta Enterprise – out of 50 applicants – with six at a very advanced stage. Moreover, in the blockchain sphere, 34 prospective VFA service providers, 21 of which belong to crypto-asset exchanges, possess Letters of Intent, and have submitted them to the authorities to acquire their licences.

Therefore, caution in proclaiming the arrival of a golden goose – in the form of a new, profitable industry, whichever that may be – must be taken. Solid research and development; investment in education; and the laying down of solid foundations are essential preliminaries before the media and the authorities cry out from the rafters and step into gear, building hype and expectations. Underpromise and over-deliver should be an axiom more entities in decision-making positions take on.

Yet, this is not to say that progress in these sectors is not welcome.

Far from it. Malta is a small island with limited natural resources, and it has always survived on the ability to transform hay into profits.

And, indeed, change and innovation are key to the future prosperity of the island, its businesses and its people. But, judicious work is required, with an emphasis on establishing solid footholds before we count our chickens.

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Advertising Enquiries Tel: 2132 0713 Email: info@contenthouse.com.mt Advertising Sales Matthew Spiteri Director of Sales and Business Development Jean Mark Meli Senior Brand Sales Executive Lindsey Napier Director of Sales and Operations Sue Ann Pisani Advertising Coordinator Printer Progress Press Ltd.

BUSINESS OPINION

Building the blockchain island

JP Fabri On 1st November, 2019, the MFSA announced that it had received Letters of Intent from 34 prospective VFA service providers, 21 of which pertain to crypto-asset exchanges.

Only 12 months earlier, three Bills of law establishing the blockchain and cryptocurrency sector in Malta became effective. After months of consultation and tweaking, the Bills are among the most holistic sets of legislation that any jurisdiction has put forward in the field of Virtual Financial Assets (VFA).

During these past months, there was a lot of hype around Malta establishing itself as a blockchain island and the numbers published elicited mixed reactions with many seeing them as too low as a basis for a new economic sector. However, one must also keep in mind that the sector is still very much in its infancy and it is pertinent that Malta attracts quality players to its fold.

Numbers apart, this is yet another prime example of Malta’s capacity to use its jurisdiction in order to carve out niche economic sectors. If we just look around at the

current economic pillars that sustain our economy, and which include financial services and remote gaming, one would easily appreciate the power of regulatory vision which Maltese legislators have had in the past. Our present economic success is also built on the strong foundations that these sectors were built upon.

The blockchain island vision has been built around the enactment of these three Bills. However, the development of an ecosystem is not only dependent on the regulatory frameworks. In fact, the legislative dimension is just one of a number of factors that determine the success of any ecosystem.

As one can expect, having a vision and a strategy is key to building any ecosystem. In this respect, one must say that the Maltese Government had a very clear vision when establishing Malta as “the blockchain island”. The setting up of a task force, as well as the publication of the National Blockchain Strategy and the enactment of these Bills are a strong testimony to this vision. This vision needs to now permeate into the different levels of Government and civil service. We truly need a new era of governance and governing, one which is truly smart and digital.

Moreover, the regulatory framework does not stop with the legislative Acts passed. It is now crucial for the regulators involved, which include the newly set-up Malta Digital Innovation Authority, the Malta Financial Services Authority and the Malta Gaming Authority to deliver an efficient and quality-driven level

of service to the industry. To this end, they require the resources and capacity to do so. Regulators must also foster an open dialogue with service providers and operators to ensure that feedback loops are present in the system.

The service providers also play a key role in developing this ecosystem. They will be the main touch point for foreign investors. They are the prime ambassadors of the jurisdiction and the responsibility is huge. It is, therefore, imperative that service providers respect the clients but also the jurisdiction itself and they must remain knowledgeable and always give professional advice. This brings us to another main determinant of the successful development of the ecosystem: education and human resources.

As Malta’s labour market remains buoyant, human resources are probably one of the most pressing challenges that the economy is, and will continue, to face in the foreseeable future. In a sector which is knowledge-intensive, skills and

trained human resources are essential. Our educational institutions are critical. The University of Malta is taking a lead in this. However, more efforts need to be taken to ensure that this sector, and others, will be adequately resourced in the years to come. Initiatives that were approved by the Government earlier this year to bring over more third country nationals are also necessary to sustain Malta’s economy.

However, this is not without its own challenges and a holistic plan for human resources and the integration of foreign workers is needed.

Ecosystems also require support structures to operate effectively. In this case, the blockchain island requires a host of support structures which include an effective and supportive banking structure. This is currently Malta’s main weakness and concern. The banking system is undergoing a major de-risking exercise and a number of niche economic sectors, including cryptocurrencies, medical cannabis and remote gaming are heavily un-

derbanked. And, this is not to mention the limited correspondent banking facilities. It is a matter of national importance as a number of sectors can be jeopardised without the adequate access to banking facilities.

In essence, an ecosystem does not only depend only on a regulatory framework, although it is central to its sustainability. The blockchain island requires further initiatives to truly materialise and this will continue to be a work-inprogress. Agencies such as Tech.Mt and FinanceMalta have a key role in making this a success, not only by promoting Malta, but, more importantly, by ensuring that the ecosystem deepens and that any weaknesses or challenges are tackled. It is now the responsibility of all stakeholders – public and private – to ensure that we truly succeed in launching new economic sectors.

JP Fabri is an economist and the Director for Regulatory & Advisory at ARQ Group (www.arqgroup.com)

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MDIA states Malta in “strong position” to foster growth in the industry continued from page 9 posed by the applicant. “This is absolutely vital to the granting of MDIA technological certification, further ensuring that tech-standards are met and, as a result, consumers are protected,” they said. To date, the MDIA has approved five SAs tasked with auditing ITAs submitted for approval, but the entity has not granted any ITA licences, as required by law.

When asked to explain the reason for this, the Authority spokesperson stressed that the legislation was just one year old, and its focus “was primarily that of certifying our very first group of SAs.” They emphasised that this was not a “hold up” but “an important part of the paced and consistent growth of MDIA.” Moreover, “it is only in certifying the SAs at the very earliest stage that the Authority can be of value to ITAs,” the spokesperson said.

The accreditation of SAs, they continued, “serves as a seal of approval which certifies that the service provider(s) possesses the

necessary technical skills, aptitude, capability and experience to handle systems audits related to ITAs. This crucial process complements fur-

ther MDIA’s work in terms of promoting transparency and auditability, ultimately safeguarding Malta’s reputation in the use of ITAs.”

“In the next year we foresee a good number of licensed VFA service providers operating in or from Malta, which, in itself, may well attract more service providers to seek a licence under the VFA regulatory framework.” – MFSA spokesperson

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89 per cent of local businesses better off in Single Market – MBB study A study commissioned by businessrepresentative entity, the Malta Business Bureau (MBB), has indicated that 89 per cent of local businesses claimed they are better off since joining the European Union’s Single Market, MBB President Simon De Cesare announced in a presentation yesterday.

The study, carried out by Grant Thornton, assessed the impact of the European Single Market on Maltese businesses, and determined the barriers and bottlenecks that exist, while attempting to propose a way forward. The study was done “in tandem to a process by the European Commission, where it is currently reviewing the barriers that remain in the Single Market, and what can be done to overcome them over the 2019-2024 EU political cycle,” the entity said.

The methodology consisted of simultaneous qualitative and quantitative approaches, with an online survey created in which 150 businesses participated and provided their feedback. Sixty-seven per cent of respondents had already been incorporated prior to EU accession. The target group was evenly represented across sectors and business size. In addition, a number of stakeholder consultations were carried out in order to gain in-depth context and perspective, MBB explained.

Despite the high figure expressing satisfaction with the Single Market, the MBB President was keen to stress that this should not “allow us to get complacent”, pointing out that there are many issues which remain unresolved. “Between the traditionally strong manufacturing, wholesale and retail sectors, an average of 20 per cent have replied that they are not better off since Malta joined the Single Market. They, along with other sec-

tors of the economy, cite various challenges, such as barriers to trade, administrative burdens and issues relating to legislation, amongst others,” he noted.

Other challenges include compliance costs to sell goods and services to other member states, with overly complex procedures still in place.

There was also “a lack of information, and sometimes willingness from national governments” in being open for business to companies based in other member states, Mr De Cesare said.

In addition, testing, certification, labelling, approval and authorisation procedures “are fragmented

“Mutual recognition of compliant products remains a principle on paper but is often a bottleneck in practice.” – Simon De Cesare, MBB President

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“e current resources available to help businesses, such as the Your Europe Portal, the Points of Single Contact, and the Single Digital Gateway should be better marketed in order to increase awareness and usability.” – Simon De Cesare, MBB President and do not function in the same way as a single market actually should.” Indeed, Mr De Cesare stressed that “mutual recognition of compliant products remains a principle on paper but is often a bottleneck in practice.”

Moving along, the MBB President also stated that an almost unanimous 96 per cent of respondents “have told us that they wish to see simplification in services regulation. This confirms a perception that we have felt for a long time that, at European and national levels, several obstacles remain to providing services to consumers and other businesses. Services regulation in the EU remains fragmented and overly-complex, with the requisite procedures proving to

be a hindrance and duplicate information often being required by different authorities.”

He also stated that respondents have expressed concern on the implementation of legislation at a national level, with 35 per cent showing displeasure about the ineffective enforcement of EU law in Malta, in particular with regards to market surveillance.

In the meantime, another 26 per cent have indicated that they are not happy with the inefficient implementation.

“We believe that market surveillance authorities should be given greater resources in order to effectively monitor and enforce rules set at EU and national levels. It is crucial that all businesses

operate on a fair level playing field, by ensuring that standards such as labelling and packaging restrictions are adhered to,” the President said in separate, exclusive, comments.

He also expressed his belief that the study’s results will provide enough material to be able to back up lobbying work in Brussels over the next five-year political cycle with evidence and hard facts. “This will enable us to pinpoint accurately to the key decision makers in the EU

where exactly the problems lie, and this will aid us in our quest for tangible solutions,” he explained.

And, indeed, yesterday, Mr De Cesare said that the MBB has drawn up a series of recommendations based on these findings.

These include: strengthening market surveillance authorities to ensure that all standards are consistent across member states; improving the effectiveness of tools catering to businesses; marketing “the current resources available to

help businesses, such as the Your Europe Portal, the Points of Single Contact, and the Single Digital Gateway to increase awareness and usability,” and, lastly, putting official structures in place in Malta to ensure that consultative processes, between businesses and the EU, are done in a timely manner.

During the event, the MBB delegation presented this study to Minister for the Economy Chris Cardona and Minister for European Affairs Edward Zammit Lewis.

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LOGISTICS

How the mitigation of risk defines true logistics expertise e CMR Convention, enacted by the United Nations in 1956, and to which Malta became a signatory in 2006, recognises that whilst transport and logistics operators have their responsibilities when carrying goods on behalf of their clients, the risks involved that may result in the loss or damage of cargo are not bestowed entirely upon the transporter. is is why business owners should choose their transport operators carefully and make sure they are well equipped to mitigate the risks involved, says Franco Azzopardi, Chairman and CEO of Express Trailers.

We all grow up with the notion that, if you are in possession of something, you are fully responsible for it. Likewise, in carriage and logistics, customers would expect that whoever is carrying, or is in the possession of the cargo, carries the full responsibility for it.

But according to the CMR Convention, this is not so.

Had it been the case, no carrier in his right frame of mind would be in a position to guarantee and carry such a huge risk for the price charged for the carriage.

Otherwise, the prices of carriage would skyrocket, as would insurance costs for the carriers. And this is where the CMR Convention comes in. For, whilst logistics is a sector that attracts risk, some risks can be mitigated and others can be transferred, whereas certain residual risks will remain with the owner and the transport operator.

So, in the case of the loss or damage to cargo, for example, if there is a consignment of 100 items costing €500 each but weighing 200g each, the cost to the carrier would be €10 per kg that is €200 - while the cost to the owner of the cargo would be €49,800 (€50,000 less the €200.)

Needless to say, if the carrier is condemned by a court of law to have exercised (as the law puts it), ‘wilful misconduct’, which verges on criminality, then the carrier may be condemned to pay the full value of the cargo. The point here is that the owner of the cargo runs the risk of losing €49,800 in our example, not to mention the loss of profits and sales disruption.

Does not this, therefore, justify some assessment of the carrier company before entrusting it with the job?

Risks in our business lie in various parts of the process: the book-

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LOGISTICS

ing; correctly understanding the customers’ needs; accurate planning; clear communication with all parties involved; the choice of equipment and the people who will execute the job; the chosen route; and the selection of the partners we choose wherever we need support services. All this is welded into the external risks on the road and on the ocean, not to mention strikes; illegal immigrants attempting to enter countries as stowaways in trailers; adverse weather; breakdown of equipment; and so many other risks. Expertise in logistics, together with the acquired experience and the obsession to do things right with the correct equipment, people and control towers are the right qualities that reduce as much as possible the costs of damage and loss beyond the CMR limitation of €10 per kg, which would be borne by the customer.

The discipline of risk management in logistics might not be as sophisticated as in other financial sectors, such as insurance and banking for example. However, at Express Trailers, we are constantly looking at the perceived risk and we take this aspect of our business extremely seriously. From a governance perspective, in fact, as a Group, we address risks through a board committee. We have emulated other sectors such as banking, finance and investment operators in this regard, especially because those sectors are regulated and

‘THE LOGIC’ CENTRE WHERE MANAGEMENT, ADMINISTRATIVE AND OPERATIONAL STAFF BECOME EXPERTS AND PROFESSIONALS IN MITIGATING LOGISTICS RISK.

have taken risk management to higher echelons of perfection. I believe that our company, with this tone, its culture and its choice of people and equipment, reduces drastically the risk of incidence of an event that results in business disruption and the cost of replacing the cargo.

On this sub-committee, we are constantly challenged by the question ‘what if’, because in transport and logistics, so many things may go wrong. Sixty years of experience have already taught us a lot and we know the answer to most ‘what-if’ questions. This is why Express Trailers was one of

the first service companies in Malta to be ISO-certified. We are constantly training our people and investing in the best talent.

We adhere to strict quality control procedures; we employ a complement of people who handle the repair and maintenance of our fleet; we keep investing in new technol-

ogy and equipment; and we keep training our drivers to be the best on the road. These are, ultimately, our ambassadors and the carriers of our pride and reputation.

Safety at work has always been a defining trait of this company, as reflected in the corporate culture and tone that resonate the respect we have always shown towards our people and our clients. We ensure constant safety by giving continuous training to our employees.

After the launch of our Express Trailers Training Academy last year - offering staff continued training to become professionals this year, we inaugurated our brand new learning hub ‘The Logic’, a state-of-the-art multimedia discussion centre. We turn our employees, management, administrative and operational staff, into experts and professionals in their work and this, too, is part of our way of mitigating risks.

We are doing our part. Therefore, the logical questions should be: are business owners assessing their side of the risk?

What is the risk of losing business and incurring costs if cargo does not make it to destination, not to mention the risk of not having stock to sell for a period of time? Are businesses doing their part to mitigate their side of the risk by making sure to trust their cargo with the operator who is best equipped to mitigate the risks?

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TRANSPORT

GoTo car sharing platform to launch new scooter service in December Jo Caruana Just over a year as Malta’s leading car sharing platform, GoTo has announced its transformation into a multi-vehicle platform, with the launch of its new scooter service in the first half of December.

Having launched in 2018, GoTo has already made its mark on the local mobility services sector, with over 11,000 users now registered and its fleet making an average of 750 trips per day across both its One-Way and Roundtrip solutions.

“Now, in adding scooters to our portfolio, we want to be able to address different mobility needs and provide our customers with the freedom to choose the solution that suits them best, from a comfort, pricing and convenience perspective,” explained Go-To CEO Liran Golan.

“Thus, the next step on that path is introducing our GoTo scooters. We’re launching this new service with 300 brand new electric vehicles. Our customers can now use the same app to pick the service they’d like to use, including our scooters,” he outlined.

As they are smaller and lighter, scooters present the ability for users to avoid most traffic situations and parking constraints, he continued. “They are particularly convenient for shorter trips,” Mr Golan said, “while cars are more comfortable for most people, especially for longer distances, groups, or when more storage space is needed.”

Just as with One-Way and Roundtrips, GoTo scooter rides can be booked through the convenient mobile app. Pleasingly, the CEO also explained that the map interface now includes filters everyone can use to hide or unhide mobility and parking options. “By simply tapping one of our 300 scooters available on the map, our customers can book a trip and pay as little as €0.19 per minute on the Savings Plan, €0.20 per minute on the Standard Plan, or €0.21 per minute on our Basic Plan,” he asserted.

Explaining the safety information that users might need to know, Mr Golan explained that all customers need to be aware

of, and follow, Maltese traffic legislation in every circumstance, including the use of helmets at all times while riding the scooters. “A licence that allows riding two-wheel vehicles of 2.4kW or equivalent will also be required to be able to book a scooter ride,” he said.

And while the majority of its users are individuals, GoTo has witnessed a marked rise in its business users in the past few months, with more and more companies keen to consider how a shared mobility

model could help to provide an effective transport solution. In this regard, GoTo’s effective business service, which provides businesses with plans that are catered to their needs, now also incorporates the scooter offering. “The rate for our business accounts is just €0.16+VAT per minute. Each business driver will need to have a valid licence according to our terms and conditions for using scooters,” the CEO said.

“Our customers can now use the same app to pick the service they’d like to use, including our scooters.”

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As a result, GoTo can now provide a well-rounded service for companies that once found it effective to own their own fleet for their employees to use. But, today, with costs rising and the traffic situation more challenging than ever before, business owners realise that the landscape has changed – and GoTo is able to seamlessly align with that.

“Businesses understand that it doesn’t make sense for their cars or scooters to be parked idly for so much during the day when they could be effectively sharing their fleet across more team members, or even with other organisations. The upshot is that this is both a cost-effective solution, and one that helps them to improve their corporate social responsibility from an environmental perspective,” he affirmed.

In fact, the environmental aspect is a key benefit for individual GoTo users too, who believe that car sharing – and now scooter sharing – reduces their environmental impact and is more sustainable than vehicle ownership. Just like with their car counterparts, the new GoTo scooters provide for an end-to-end service, with users, thus, avoiding having to pay for licensing, insurance and petrol. “Over time the savings are tremendous,” Mr Golan said.

Moreover, just as with the car sharing side of things, it is very easy for scooter users to sign up to use GoTo. “With our mobile app, which is available from Apple’s App Store and Google’s Play Store, everyone can access all of our services. Creating an account is incredibly easy: simply sub-

“Businesses understand that it doesn’t make sense for their cars or scooters to be parked idly for so long during the day when they could be effectively sharing their fleet across more team members, or even with other organisations.” mit the required contact information, a copy of your ID card and driver’s licence, as well as your credit card details. It can all be done in the app itself, or on any browser by accessing join.goto.com.mt,” he said.

Looking to the future, GoTo plans to continue improving its technology and service at every level, with the vision to become the leading option for everyone to move around Malta and Gozo.

“We’ll continue to understand and address consumer needs with sustainable, shared mobility solutions and, beyond that,

we’re looking at multiple potential fronts for expanding our service. Besides adding new services, we’re investing in technologies such as AI to improve our existing offering

by refining the distribution of our vehicles, our parking spaces and offering better pricing solutions. There is much more to come,” Mr Golan concluded.

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FINANCE

FIMBank strongly geared for the provision of international settlements As a trade finance specialist, FIMBank has a long-standing reputation for an efficient delivery of international settlements, for a wide range of corporate customers both locally and abroad. FIMBank is consistently driven to provide tailor-made solutions with a strategy that hinges on the commitment to provide added value to its local and international clients by focusing on specialised customer service and sophisticated systems.

The bank offers the possibility to execute payments worldwide, with same-day, next-day options, for normal or high value transactions. This is part of its corporate banking suite in the major trade currencies, together with fixed term deposits and foreign currency payments.

Over the years, the bank has built a team of international corporate bankers with experience in identifying customer needs and matching these with system solutions complemented by dedicated support. FIMBank is constantly listening to its customers and potential business partners in order to offer valued solutions and enhance efficiencies for the customers’ benefit, ultimately helping them to reach their goals.

The quality of the bank’s delivery relies on its team, made up of dedicated on-boarding and helpdesk personnel, relationship managers, and product development specialists. Its work is centred on ensuring that it continuously aligns itself to everchanging requirements in local and international business.

The delivery of international settlement services is facilitated by the bank’s digital banking platform FIMBank Direct, with a commitment to provide an enhanced banking experience to its cus-

tomers, based on a strong infrastructure built to support international multi-currency settlements and fixed term deposits. This provides a seamless experience to corporate customers. Coupled with

this is the fact that the bank has recently extended its payment cut-off time. In a bid to enhance its standing as a leading provider of local and international corporate banking products, FIMBank recently

announced that payments executed up until 4pm CET, via its digital banking platform, can now be processed on the day, subject to all criteria being met where applicable.

FIMBank Direct provides an efficient and convenient international payments framework and fixed term deposit products. Corporate and wholesale banking services offered include balance

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FINANCE

view and management; the ability to book single or multi-currency payments; and access to statements and advices.

Apart from these features, FIMBank’s corporate customers benefit from enhanced security through the innovative authentication app, the FIMBank CAM. This technology allows corporate customers to log in and perform payments, anytime, anywhere, without the need to carry a hardware token.

FIMBank is also a direct participant in TARGET2, a payment system owned and operated by the European Central Bank Eurosystem. TARGET2 is the leading European platform for processing large-value payments, and is used by both central and commercial banks to process real time payments in euro. As part of the advantages of TARGET2 payments, FIMBank is directly reachable for euro payments without the need for payments to go through its euro correspondents. Membership of the system also facilitates the processing of high value priority payment orders in ‘safe’ central bank money with immediate finality, even across borders, thus reducing the inherent risks in payment transactions.

Together with its bespoke offering for immediate and efficient

settlement options for corporates, FIMBank offers fixed term deposit accounts for such organisations, at competitive interest rates for a variety of both long-term and short-term tenors. Once onboarding is successfully completed, corporates may opt for

different tenors and competitive rates, solely via the bank’s digital banking platform.

The bank has always dedicated its focus and resources towards investing in systems geared to cater efficiently for settlement services on a global scale. Its typi-

cal customer would be a corporate entity, transacting both locally and internationally, and using multiple currencies for settlements. Thanks to its product portfolio, the bank is in a position to provide a framework within which its customers can look for-

ward to improving their business profitability.

To learn more about the benefits that FIMBank offers in relation to its international settlements, contact their Business Development team online cm.businessdev@fimbank.com

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STOCK MARKET REVIEW

Highlights of Interim Directors’ Statements

Edward Rizzo The formal requirement for companies to publish semi-annual Interim Directors’ Statements was removed exactly four years ago with changes by the European Commission to the Transparency Directive.

Despite the removal of the necessity for companies to issue such publications, most companies across the international financial markets continued to issue Interim Directors’ Statements – or Trading Updates as they are commonly referred to in the UK – to keep the market regularly abreast of the most important developments.

Unfortunately, in Malta, only a few of the companies continued to recognise the need to maintain a regular flow of information to the market via these Interim Directors’ Statements. In recent weeks, some of the companies listed on the Regulated Main Market published such announcements and the main highlights are reproduced below.

Malta International Airport plc (MIA) is the only company that publishes condensed financial statements when releasing its semiannual Interim Directors’ Statements in May (providing Q1 highlights) and November (providing figures for January to September). On 6th November 2019, MIA published an Interim Directors’ Statement confirming that its performance was superior to the corresponding period last year and also published condensed financial

statements. These financial statements showed that revenues grew by 9.2 per cent to €77.3 million; operating profits increased by 11.5 per cent to €43.1 million; and profits after tax climbed by just over 8 per cent to €26.9 million. It is also worth highlighting that, despite the €12 million in capital expenditure incurred by MIA during 2019, as at the end of September 2019, MIA remained debt-free (excluding a lease liability of €52.2 million) and also held cash balances and fixed-term deposits amounting to a total of €29.6 million compared to a cash balance of €20.3 million as of 31st December 2018.

MIA stated that, with traffic projections remaining in line with expectations, the final quarter of the current financial year is expected to follow the same positive trend registered in the first nine months when passenger traffic grew by 6.5 per cent. As a result, MIA is expecting to surpass the financial targets as set out at the start of the year. On 17th January 2019, MIA had forecast a 5.8 per cent increase in passenger numbers to a new record of 7.2 million. The company had also said that it was targeting revenues to amount to €96 million and a net profit of €31 million.

Following the publication of the financial information of MIA for the first nine months of the year, one can perform additional analysis to gauge the level of earnings actually generated in the fourth quarter of 2018, and use this information to estimate the revenue and profitability that the airport operator could generate during the whole of 2019.

During the final quarter of 2018, MIA had registered passenger movements of 1.52 million, translating into revenue of €21.4 million and a net profit of €5.44 million. Although MIA indicated that, during the final quarter of 2019, it expects to perform along the same trends of the first nine months (with passenger growth at 6.5 per cent), and the October traffic statistics show a 8.8

per cent growth in passenger movements, if one conservatively assumes that the company will only achieve the same revenue and profit in the fourth quarter of 2019, as that in the comparative period last year, MIA should, therefore, achieve overall revenue of at least €98.7 million in 2019 (+7 per cent over 2018 and also higher than the estimate of €96 million at the start of the year). It should also achieve a net profit of at least €32.3 million (+6.6 per cent over 2018 - also higher than the estimate of €31 million at the start of the year).

Moving on, International Hotel Investments plc (IHI) had last issued an Interim Directors’ Statement in November 2017. Earlier this month, IHI explained that year-end forecasts continue to show that targets set for the current financial year, ending on 31st December 2019, will be reached with EBITDA numbers expected to outperform 2018 results.

Furthermore, IHI explained in the Interim Directors’ Statement that exchange rate fluctuations in key markets where it owns and operates hotels and real estate (namely in Russia and the UK) are expected to contribute to a positive impact in the consolidated financial results, thus reversing the negative trends experienced in recent years.

As a result, although it is too early for IHI to determine the impact of any valuation movements on investment properties, or assets held by the Group, profits after tax are likely to be impacted positively.

IHI made reference to two important developments. The company stated that it had made further progress in its commitment to commence a programme of asset disposals, having as its main aim the realisation of capital gains from financially mature hotels besides the releasing of equity to fund further acquisitions across the world. In this respect, IHI confirmed that a marketing exercise is underway for the sale of the Corinthia Hotel in Prague.

Incidentally, a few months ago, IHI’s majority shareholder, Corinthia Palace Hotel Company Limited (CPHCL), also disposed of its hotel in Prague. This was announced via Corinthia Finance plc since CPHCL is the guarantor to the bonds in issue of this finance vehicle. The sale of this property enabled Corinthia Finance to redeem in full the €7.5 million – 6 per cent unsecured bonds 2019/22 – on 10th October 2019. Moreover, the announcement revealed that CPHCL will transfer €20 million arising from the sale of the hotel to a reserve account for the purpose of redeeming part of the €40 million – 4.25 per cent – unsecured bonds maturing on 12th April 2026.

The most interesting aspect for IHI shareholders is that in an updated Financial Analysis Summary, also published on 30th August 2019, it was stated that CPHCL is recognising “a profit on disposal of the Panorama Hotel and adjacent garage amounting to €43.8 million”.

Moreover, it is important to note that the Panorama Hotel in Prague and the adjacent garage had an aggregate carrying value of €43.9 mil-

lion in the financial statements of CPHCL as of 31st December 2018.

IHI shareholders should therefore be attentive to upcoming announcements to gauge whether the company will also be managing to register a capital gain from the ongoing sale of the Corinthia Hotel in Prague which had a balance sheet value of €88.3 million as of 31st December 2018.

Bank of Valletta plc was the first company to issue its Interim Directors’ Statement, when on 28th October 2019, it noted that its performance was broadly in line with expectations. On the positive side, net interest income was marginally higher when compared to the corresponding period last year, and commission and trading income also registered a slight improvement as the bank’s efforts at seeking alternative revenue sources, to mitigate the impact of the de-risking initiatives, and competitive pressures are yielding positive results. On the other hand, BOV’s performance reflects the higher costs attributed to the transformation programme, which is aimed at lowering the bank’s risk

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STOCK MARKET REVIEW

profile and ensuring long-term sustainability. Furthermore, the bank also recorded lower reversals of loan impairment provisions.

BOV announced that its capital ratios continued to improve while the bank also continued with its capital optimisation plan and, as outlined in the publication of the FY2018 results, BOV is still actively seeking to raise additional Tier 1 Capital by the end of this year which will further strengthen its regulatory capital.

BOV also highlighted that its ongoing transformation programme covers a number of specific streams, mostly relating to governance and risk management, and is primarily aimed towards the strengthening of the bank’s regulatory capital position, lowering the risk profile while ensuring longterm viability, in line with its primary strategic priority.

Last week, the fourth smallest company on the Regulated Main Market by market capitalisation – Main Street Complex plc – also published a detailed Interim Directors’ Statement updating the market on its performance since the start of the year. The company mainly highlighted that it registered an 8 per cent increase in footfall to the highest ever recorded since the complex opened for business 15 years ago. It also achieved full occupancy in July 2019 when the last remaining outlet was leased out.

However, the company indicated that, due to the delay in reaching full occupancy, the 2019 financial targets, as set out in the IPO Prospectus dated 23rd April 2018 are not likely to be achieved. The company had projected a net profit for the year of €0.42 million and indicated a net dividend of €0.0218 per share. Instead, Main Street Complex plc is now expecting to reach these targets in the 2020 financial year. The company also indicated that it continues to actively seek prospective investments that would lead to the eventual expansion of its business.

Malta Properties Company plc announced that, during the third quarter of 2019, its performance was in line with expectations and showed an improvement over the same period last year. The company confirmed that the construction of the Zejtun exchange and data centre is progressing and handover to the tenant is expected during the last quarter of 2020. MPC is also reportedly actively working on the plans for the development of two other sites which are expected to be vacated in 2021. Malta Properties indicated that discussions continued with SmartCity (Dubai) FZ-LLC regarding the possible acquisition of 91 per cent of the shares in SmartCity (Malta). MPC also announced that it is in active discussions on acquiring other properties and an announcement will be made in due course.

Although the level of detail provided to the market found in the various Interim Directors’ Statements issued to date vary, they nonetheless provide a good update to the investing community ahead of the publication of the full-year financial statements in the months ahead.

Edward Rizzo is a Director at Rizzo, Farrugia & Co (Stockbrokers) Limited

Rizzo, Farrugia & Co. (Stockbrokers) Ltd, “Rizzo Farrugia”, is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. Rizzo Farrugia, its directors, the author of this report, other employees or Rizzo Farrugia on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither Rizzo Farrugia, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2019 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

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NEWS

Five years down the line for the eSkills Malta Foundation Bernadette Zerafa Malta has always been at the forefront when it comes to the technology sector. But, this is not by chance. A very good education system and first-class training have developed some well-honed and talented resources on the island. Combined with reasonable investment by digital entrepreneurs and forward-looking government policies, an ideal digital economy that attracts more local investment and leading technology firms to operate from Malta has been created. The country’s stability, the attractive business incentives, and the “can do” attitude adopted by the authorities has not only helped but has served as a springboard to our flourishing digital economy. Indeed, amongst all members of the European Union, Malta ranks 10th overall in the European Digital and Economy Index (DESI), and 9th in the terms of Human Capital as measured in the same index. DESI is compiled annually by the European Commission to serve as a barometer of the digital capaibilities of countries in the bloc.

Of course, when it comes to human resources, this has created a considerable challenge for Malta. The digital industry requires ICT human resources not

just in quantity but also in quality and these must be equipped with the right industry skills. This has kept all organisations involved with the supply side of the equation very busy. Coupled with this, the need for digital skills – across the board – has increased substantially due to the proliferation of technology in our everyday lives. The eSkills Malta Foundation was formed in 2014 to take on such challenges.

The eSkills Malta Foundation is made up of various representatives from Government, industry and education, who can contribute to the increase in digital skills and the development of the IT profession, thus helping us with the following mandates: to advise Government and the relevant stakeholders on matters related to eSkills policies; to contribute to the expansion of ICT educational programmes and related formative initiatives; to lead an ICT professionalism development programme; to instigate further reform in the ICT educational offerings and contribute to the capacity-building of the ICT education community; and finally, to champion campaigns and promote the Maltese eSkills potential locally and internationally.

International best practices indicate that multi-sectoral partnerships are one of the key approaches

in achieving synergy in the sustainable development of the right digital skills. The eSkills Malta Foundation was established by the Maltese Government to reflect this paradigm of inclusive synergy. The founding members of the Foundation are the Ministry for Education and Employment, the Malta Information Technology Agency, the Malta Communications Authority, Malta Enterprise, The Malta Gaming Authority and The Malta Chamber of Commerce, Enterprise and Industry, with the Office of the Prime Minister as a subsequent founder.

STRATEGIC GOALS The eSkills Malta Foundation has been following several strategic goals that were established following its launch.

These are valid goals that are occasionally tweaked depending on European and local developments in the digital sector. The Foundation is guided by the following strategic goals: The provision of a coherent and visible policy framework that will guide key multi-stakeholder actions. The initiatives of the Foundation are guided by an annual plan with actions, determining the stakeholders involved.

Improving the image and popularising ICT careers, which is an important aspect if we are to increase the number of students taking up ICT, and the number of professionals in the sector. The Foundation develops engagement activities and takes part in multi-stakeholder events to address the perception of ICT careers with a view that ICT career studies are based on knowledge and with a rationale that Malta’s national well-being depends on the increase in the number of ICT practitioners. The activities also need to reflect on the gender imbalance that is prevalent in the ICT industry.

Energising the education ecosystem is also one of the most important goals. The ICT education system in Malta needs regular support to provide the skills needed by the ICT industry; boost the short term skill supply which constrains growth; provide information on the future skills trajectories; provide guidelines on continuous professional development; and promote the best HR practices in the ICT industry and digitally-enabled companies.

Engaging with European and global digital skills organisations to share best practices that can be implemented locally, keeping an eye on the available European standards and frameworks which relate to digital skills and competences is yet another goal. This,

thus, encourages the development of the ICT profession as suggested by our local and European stakeholders.

THE NATIONAL COALITION The eSkills Malta Foundation is an authorised and appointed National Coalition for Malta, made up of representatives from Government, industry and education.

The coalition builds on the work of the Grand Coalition for Digital Jobs. Since 2013, the Grand Coalition, through the eSkills4Jobs campaign, has led to the training of more than two million people in digital skills. The aim is to have a national coalition in all member states by 2020. As the National Coalition for Malta, the Foundation has made a pledge to the European Commission to train 60 guidance and career teachers every year. The National Coalition is also committed to implementing the European strategy and blueprint for digital skills in Malta, hence being an active member of the Digital Skills and Jobs Coalition set up in 2016.

ACHIEVEMENTS FOR THE FOUNDATION: The Launch of Malta’s ICT skills audit The eSkills Malta Foundation is entrusted with several mandates by the Government in relation to digital skills. Indeed, the objectives are very much in line with EU recommendations about the target areas which each EU country should focus on to improve the expansion of digital skills in their own country. One of the important pillars of these objectives is to lead an ICT professionalism programme.

The Foundation recognises this important requirement, which is

felt not only locally, but also amongst all European countries.

Furthermore, the knowledge and skills attained by students and employees must match the skills required by the industry. In this respect, the eSkills Malta Foundation launched the ICT Skills Audit on 26th April 2017, which encompasses the skills required by the ICT industry and the provision of education. The audit was a collaboration between the Foundation and FastTrack into Information Technology (FIT) from Ireland.

The project is carried out regularly and is, in fact, being carried out as we speak.

CEN/Technical Committee 428 and ITPE Establishing standards to guide in the maturity of the IT profession will provide enormous benefits to the IT professional and practitioner community, engaged across various business and Government sectors. Additionally, standards must take into consideration wider implications related to the European Union single market strategy and policy, industry requirements, innovation trends and, last but not least, social needs.

CEN is the recognised European Standards committee, and the CEN/TC 428 is the technical committee with the responsibility for the standardisation of a common language of professional digital and IT competences, which include skills and knowledge applied in all domains. Since early 2017, the eSkills Malta Foundation was authorised by MCCAA, the national standards body, to represent the country in this important ICT standards committee.

The Foundation also had the

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pleasure to host this committee in Malta in October 2019.

This is part of the European IT Professionalism Framework, which includes four pillars, namely the eCompetence Framework (a standard since 2016), IT professional ethics, the European body of knowledge in this area, and Continuous Professional Development (CPD). Malta aspires to this framework and the Foundation promotes it with the industry, through local conferences and workshops.

Launch of guidelines to increase and retain women in ICT One of the most important objectives of the eSkills Malta Foundation is to encourage girls and women to consider joining the digital sector as a career and to encourage employers to provide the right environment platform to implement gender balance in their employment policy, also implementing initiatives to increase and retain women in the ICT sector.

The guidelines to increase and retain women in ICT was a highly interesting project which involved the study of current European best-practices, engagement and consultation. The study was launched on 11th April 2018 and is targeted to digital employers to help them in reducing the gender gap. The eSkills Malta Foundation has plans to take this project further in the very near future.

Launch of the National eSkills Strategy 2019 - 2021 These are times that digital technology is prevalent across all sectors, and this has created a need for digital skills for most roles and positions of employment. Digital skills are not just relevant for ICT practitioners,

but also for the workforce, education providers, and society. The National eSkills agenda seeks to develop a larger digital talent pool and to ensure that individuals, and the labour force, are equipped with adequate digital skills. Since 2017, member states of the EU have been invited to develop comprehensive national digital skills strategies, and in this respect, through the eSkills Malta Foundation, Malta is one of the first few countries to specifically step up to this challenge.

On 13th March 2019, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation, Silvio Schembri launched the National eSkills Strategy 2019-2021, making Malta the first EU member state to have a national strategy for digital skills. This strategy is currently being implemented.

DIGITAL LITERACY AND ICT IN EDUCATION Through various initiatives with relevant stakeholders in the local education, the Foundation contributes to the expansion of ICT education at a formative, secondary and tertiary level. In collaboration with the Ministry for Education and Employment, through the Psycho-Social Services Section, the Foundation organises ICT teachers visits, and careers sessions to career guidance teachers and career advisors, through the ICT Exposure Experience to give students a taste of the ICT industry by means of a weeklong placement. The Foundation also collaborates with the Directorate for Digital Literacy and Transversal Skills for the implementation of other initiatives including the further implementation of the EU SelfReflection tool (SELFIE) and others.

EU CODE WEEK This year, for the third consecutive year, Malta has placed first with the most coding events held per capita.

The number of events being held in Malta is constantly on the increase, with 147 events in 2017, 190 events in 2018 and with more than 500 events in 2019. The impressive teamwork carried out by Malta’s Code Week Ambassador, Edu Coordinator and lead teachers was fundamental for this success. EU Code Week 2019 was again a record-breaking year for the initiative with over 66,000 activities organised, approximately 22,000 more than in the 2018 edition.

In Malta, EU Code Week is organised and championed by the eSkills Malta Foundation, during which, in collaboration with relevant stakeholders, large to small, various code-related activities are organised with the intention of increasing digital skills and knowledge through coding in a fun way.

CONCLUSION Since its inception, the Foundation has stepped up its networking within the EU, and its international counterparts, and has been very visible, contributing towards the various subject areas, some of which have been mentioned above. The Foundation will definitely continue with its journey in helping and supporting all the pillars of digital education, as well as ICT professionals and practitioners, the workforce and broader society, in acquiring the right skills, competences and attitudes. This was always a big challenge for the eSkills Malta Foundation and Malta in general. And, with the emerging technologies of Artificial Intelligence (AI), Internet of Things (IoT), Data Science and Analytics, Distributed Ledger Technology (Blockchain) and many others, the future ahead is even more challenging. The Foundation operates in collaboration with many other local and European partners to achieve its aims and successful outcomes.

Bernadette Zerafa is a manager at eSkills Malta Foundation

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BUSINESS UPDATES

Watch out for Libra coin in your Christmas stocking Anna Guth The pseudo-cryptocurrency Libra coin has been under immense criticism in the last weeks as the currency will not run on decentralized blockchains as usual cryptocurrencies do. Even though Germany, France and other countries have already voted to block the application for the time being, a change in the number of payers, who pay with electronic payment methods, seems inevitable.

French Economy Minister, Bruno Le Maire, announced that Libra is not welcome on European soil, because sovereignty is at stake. In Malta, cashless transactions are becoming increasingly popular. It is clear that if Libra should also catch on in Malta at some point, it needs new regulations on cryptocurrency to plug any loopholes. While the contro-

versial Libra coin may struggle to see the light of day next year, Facebook Pay is a done deal.

The exciting social network will start with its own payment service. With this service, users should be able to send money to other users or shop in in-App shops. Donations can also be processed. Security is promised

by PIN protection in payment transactions. The product is versatile as it can be used in Facebook itself, as well as with Messenger, Instagram and WhatsApp. The date when Facebook Pay will be made available in Malta, or in Europe, has not yet been announced. Yet, according to the company´s statement, Facebook now works with partners such as Paypal and Stripe on the processing of payment processes and can rest on existing infrastructures. This makes it independent of the Calibra wallet that is intended to be used in the settlement of the Libra network.

However, it is not yet known how long it will take for a user of Facebook Pay to rely on a Libra account when Libra is launched under the Calibra association.

An added complication is that Paypal has decided to give up participation in the Calibra association, claiming it is doing so in order to concentrate on existing business. According to the US

media, Visa, Mastercard and Stripe are uncertain about their participation because of strong political resistance. Companies that originally wished to partner in the Libra consortium are doubting whether they wish to continue. Critics lament that the Libra project has stalled or is only moving slowly.

But, what are the pros and cons of such cryptocurrencies? At first glance, cryptocurrencies seem to bring only benefits: a stable currency without fluctuations, and a stable cushion for savers. Paid money would, if Libra is successful, move into a large reserve fund managed by various banks. Interest would cover costs and the dividends could be paid out to members of the Libra Association.

The other side of the coin shows that there are scaremongering doubts from US lawyers and financial officials that are growing louder about possible money laundering, drug trafficking or financial loopholes and tax evasion.

However, the Americans could now be affected by the state crypto currency of China, which is under pressure to publish their currency as soon as possible. The Chinese central bank PBoC has, indeed, recently announced the rapid introduction of the cryptocurrency Digital Currency Electronic Payment (DCEP), and the People’s

Bank of China is planning a comprehensive digitisation of the Chinese currency, with the Chinese currency, the Yuan, set to be replaced in the long-term.

This would make China the first country to introduce a national digital currency. The cryptocurrency would first be accessible from commercial banks, and will then circulate digital coins on to citizens. The currency could, thus, be an antidote to the imminent hegemony of power by the global crypto-business (eg Libra) from America. Since there are currently speculations that DCEP will be a central currency, it would, in such a case, be subject to the authority of the Chinese government. Chinese banks could, therefore, have even more control over the flight of capital.

Looking to the future, the entry into force of any mainstream cryptocurrency could hit banks hard.

The banking systems will play a game of horse racing during the transitory research and publication period. The champion will be the coin that works more efficiently and offers the better services to customers. Due to the potential number of users, the planned digital currency, in particular Libra, could play an important role in the international monetary system in the long term.

Yet, G7 finance ministers fear that a major currency should not

be in the hands of a private company since they would have the same privilege as nations, but without undertaking the responsibility and obligations that go with it. These G7 ministers have called for tighter regulation of digital currencies, with Facebook´s Libra igniting concern amongst the group. But, as long as regulatory and legal risks have not been resolved, the G7 will not continue to block ‘Libra-Coins’ to enter the circulation.

Back to Malta, a study from the Central Bank of Malta, has revealed that electronic payment methods are also becoming increasingly popular and it seems only a matter of time before cards and other cashless payment methods, such as Revolut, will completely replace banknotes and coins.

In conclusion, in the advent of the baby shower for Libra, one may sympathise with this revolution given that Malta, the European leader in blockchain, will be the first to adapt the legislation after deciding on the introduction of such a cryptocurrency. Will Christmas bring in the exciting news that Facebook has overcome its detractors and forged ahead with the conception of the Libra prodigy?

We have to wait to find out.

Anna Guth is a Digital Analyst for financial services firm PKF Malta

e Malta Business OBSERVER

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November 21, 2019

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BUSINESS UPDATES

Turkish Airlines corporate club’s award-winning services and products As a leading global airline for business travellers, Turkish Airlines offers award-winning services and products to corporate passengers with the Turkish Airlines Corporate Club.

Turkish Airlines Corporate Club was set up to provide time-saving benefits to corporate clients to ensure travel is made easier and more profitable. Companies benefit from exclusive fare discounts, flexible ticketing, exclusive and generous baggage allowance, as well as other pre-boarding benefits including access to the Business Class lounge.

EXCLUSIVE FARE DISCOUNTS Turkish Airlines Corporate Club allows corporate passengers to save money on every

Turkish Airlines flight booked, with special fares in business or economy class.

FLEXIBILITY Turkish Airlines Corporate Club fares allow added flexibility to rebook, reroute and refund tickets to suit passengers’ business needs. This major benefit lets companies save money and respond to ever-changing business requirements.

EXCLUSIVE BAGGAGE ALLOWANCE A very generous baggage allowance is open to economy and business class passengers allowing corporate colleagues to travel with more business essentials on international flights.

PRE-BOARDING BENEFITS Turkish Airlines Corporate Club Card travellers receive special priority check-in and pre-boarding benefits. Economy class passengers are able to check-in at FFP (Frequent-Flyer Program) counters and enter lounges prior to boarding international flights at Istanbul Airport.

Members of the Miles&Smiles programme will continue to earn miles as a Turkish Airlines Corporate Club member, which can be spent with Turkish Airlines or any other Star Alliance partner airline. Earned miles are easily tracked via passengers’ Miles&Smiles account.

BUSINESS CLASS LOUNGE ACCESS Being a member of Turkish Airlines Corpo-

rate Club means access to the luxury and exclusivity of Turkish Airlines’ Business Class Lounges, chosen by many universally acclaimed organisations and surveys as the World’s Best Business Class Lounge. Here, passengers can savour award-winning gourmet meals and freshen up or relax before a business meeting with access to showers and private rooms as well as other top class products and services.

Membership is simple and companies can sign up with no registration fees. Interested organisations are kindly requested to send an email to marketingmalta@thy.com for further information. * Turkish Airlines Corporate Club rights may vary due to contract terms and conditions.

HSBC Malta’s ‘Here to Help’ helps customers adapt to new ways of banking To support its customers to adapt to new ways of banking, HSBC Malta has launched a campaign called Hawn biex Nghin (Here to Help). At the centre of this campaign is a team of experienced employees from across the bank who will be located in the bank’s branches and who will be focused on supporting all the customers in the use of selfservice channels and digital enablement.

“Banking continues to change, and we have seen a huge shift in the use of digital and self-service channels such as mobiles, ATMs and deposit machines. This shift towards digital solutions does not mean that we will be a digital-only bank. On the contrary, branch banking will continue to be a critical part of HSBC Malta’s service offering for the longterm. In fact, we plan to open a flagship branch in Qormi in 2020 which

will be HSBC’s largest branch in the country and we will deliver the best of the bank’s services with improved access such as parking. However, we appreciate that our focus on new ways of banking might have an impact on a section of the population that is not digitally inclined. For this reason, we have a responsibility to support as many of our customers as possible, particularly those who have not been shown how to use

these services or supported in understanding how these services can be of benefit to them,” said Peter Gauci, Head of Distribution.

To this end, HSBC Malta employees will be wearing a new uniform with the campaign tagline ‘Here to Help’ clearly visible so the customer can easily spot them when visiting a branch. This team will be focused solely on assisting customers by showing them how to

use the bank’s mobile app, ATMs and deposit machines, and to understand how the bank can make their banking easier and more convenient. If required, employees can also arrange for a new debit card for customers so they can easily access ATMs or deposit machines 24/7.

This will also allow customers to use their debit card in shops to pay for their purchases without the need for cash or cheques.

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e Malta Business OBSERVER

| November 21, 2019

BUSINESS UPDATES

Agricultural products falling within the Quality National Scheme Who can apply?

The Products of Quality National Scheme is intended to give consumers certainty that a particular agricultural product has been produced following strict quality parameters. All recognised agricultural producers and processors are eligible to apply for this scheme.

Food processing plants which take in raw materials and process it to form other products are also eligible to participate in this scheme. Adhering to the conditions explained below will give the right to these operators to use the quality label on their products.

What is the purpose of this scheme?

The purpose of this voluntary scheme is to add value to agricultural products produced according to set specifications which characterise the superior quality of a particular product which goes over and above set minimum criteria as stipulated by law.

The superior quality of a particular product can be measured by different parameters such as public and animal health, improved environmental practices as well as enhanced animal welfare throughout the whole process of cultivation and rearing, processing and distribution.

How is quality attained?

Quality in crop production can be achieved in different ways by

Which sectors will be mostly impacted by the Quality Mark Scheme?

All agricultural sectors that are in the production of fruit and vegetables, but also any sector that deals with the production of animal derived products such as meat cuts, dairy products, eggs, honey and other similar products. The living conditions, nutrition and general welfare of farm animals is improved to ensure that at every step of their life, the animals are raised at a higher standard to ensure the highest quality final product.

using best management techniques that limit and control the use of fertilisers and pesticides as well as other practices such as tilling at specific times using different methods in order to reduce any possible chance of soil erosion.

Quality in the rearing of farm animals can be achieved by practicing certain animal housing regimes that permit enhanced animal welfare conditions. The type and quality of the feed given to the animals is certified and monitored by a qualified animal nutritionist. This is to ascertain that animals are re-

What were the main challenges faced by the Agriculture Directorate in the implementation of the Quality Mark Scheme?

The biggest challenge is that there are various stakeholders in the industry, with different opinions on what particular standards should be. This is a time-consuming process. A standard for a particular agricultural product needs time to be developed as this needs to be both attainable by the in-

ceiving an adequate diet during all the stages of their life. This also reduces wastage of food, a practice which also has a lesser burden on the environment due to a reduction of animal waste and subsequent sustainable disposal.

How is quality ascertained?

Quality by means of a control plan determines how a process-

Your business, all-in-one pack, with GO’s Business Infinity GO is offering a value-packed Internet package for its business clients, with Internet speeds up to 1GB through the Business Infinity Pack, helping them stay connected when it truly matters to their business.

The most competitive package on the market, the Business Infinity Pack offers improved internet speeds, free telephony, as well as a refreshed TV offering making it the ‘go-to’ product for businesses of any size.

“Our aim was to simplify our products, whilst packing in additional value for our customers. We wanted to make their decision as easy as possible. Our stream-

lined products are the result of extensive analysis of our client feedback, as well as of the operational demands of businesses today. We looked at what businesses need, what they expect, and set an ambition for delivering exactly this and more,” said Nikhil Patil, Chief Executive Officer.

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dustry and at the same time higher than the minimum standards that producers are to adhere with. All the traceability and autocontrol procedures need to be in place before products can be labelled and marketed with the Quality Mark.

Why is the Ministry for the Environment, Sustainable Development and Climate Change implementing the Quality Mark Scheme? What are the main benefits to the general public?

Producers and processors need to be compliant with the minimum legal requirments concerning food and feed law and animal welfare, however the Ministry is pushing to implement the Quality Mark as a measure to acknowledge those stakeholders which produce their products at a higher quality level. The Ministry wants to reward investments made by stakeholders by giving them the opportunity to use the Quality Mark inorder to distinguish their higher quality produce from others.

When seeing this quality logo, the general public will have the certainty that they are purchasing a higher quality product that went through rigorous auditing and quality control at the various stages of production, processing and distribution.

For more information visit https://agriculture.gov.mt, email us at ikeltakwalita.mesdc@gov.mt or call on 22924339.

ing plant operates. Any potential contamination needs to be detected and rectified by also making the best possible use of resources. In addition, every entity adhering to the PQNS needs to be in possession of a traceability procedure to record and document the story of a product, the origin of the material and the story of the process. All this infor-

mation needs to be stored on a computerised information management system accessible 24/7 by the Agriculture Directorate as the Competent Authority and administrator of the scheme. Apart from the traceability system, each entity needs to be assigned to an independent control body which monitors and audits the entity at specific intervals.

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e Malta Business OBSERVER

| November 21, 2019

BUSINESS UPDATES

Optimising the journey for the compliant customer There are few industries as rapidly evolving as iGaming – that much is a fact. Every day brings exciting new developments in the tech world, and with each new product, service, and update, operators strive to improve their offering in line with their customers’ growing expectations. It comes as no surprise, then, that optimising the customer journey is firmly at the top of the priority list for any organisation looking to compete in this industry.

The cost per customer acquisition seems to be creeping higher and higher, and keeping those hard-won customers is becoming more of a challenge as iGaming companies continue to one-up each other by offering the best product, service, deal, or promotion on the market. That’s why building and retaining customer loyalty is paramount in today’s industry.

The modern customer wants a seamless experience on your iGaming platform. Sounds simple, right?

Well, not quite. Making the most of your customer journey is crucial, but, first, you need to make sure you’ve got your basic processes and regulatory matters down to an absolute T. To the outside world, it looks like this: a customer signs up, logs in, places a bet, then wins or loses that bet. But ask anyone who really knows the industry, and you’ll quickly find that there’s a lot more going on behind the scenes.

Keeping players happy and staying compliant It all begins long before a player registers on your site. The minute they land on your page, the process has already kicked off – and you don’t want to find yourself playing catchup so early in the game. As an operator, you’re already tapping into your analytics behind the curtain, asking questions about the

user’s risk level, location, IP address, and whether or not their device has been previously blacklisted. Other key considerations should include: Are they Politically Exposed Persons (PEPs)?

Has this contact information been associated with different names before?

Does the card they’re using match the details of the user who registered?

Is their first deposit disproportionately large considering their demographic?

Later down the line, you’ll want to delve a little deeper into their ongo-

ing betting patterns and overall habits. Check what they’re betting on, and what their behaviour and spend usually looks like. Any change in habit needs to be flagged and can be as subtle as playing far beyond their established routine, a change in the type of game they choose, or a marked increase in their daily spend. Identifying patterns of behaviour indicative of addiction is essential, so the earlier you can pinpoint that behaviour, the better, and this, once again, demands that you tighten your processes. Invest time and money early on in the game, and you’ll see

it pay dividends soon enough – your loyal customers will be a testament to that.

It’s all about a positive customer experience ComplyRadar enables you to fulfil your AML obligations whilst nurturing your genuine and VIP customers. For more information on how ComplyRadar automatically detects suspicious transactions – quickly and effectively – to help avoid reputational risk and potential fines, visit www.comply-radar.com or email info@computimesoftware.com.

Valletta Contemporary to host MET[A] Gala In a unique take on the incredible New York MET Gala, Valletta Contemporary will host a onenight-only exclusive fundraising event on 14 December, the MET[A] Gala.

The gala is the largest fundraiser the contemporary art events and exhibition space in Malta’s capital city has pioneered to date. Teaming up with artist Charlie Cauchi, Malta’s culinary ambassador Marvin Gauci, and couture designer Luke Azzopardi, the MET[A] Gala will transform Valletta Contemporary with live music, delicious food, custom cocktails, and an afterparty, all covered by the most coveted local publishing houses and media outlets.

“The MET[A] Gala is a great opportunity to experience the brilliance and innovation of the New York MET Gala for the first time here in Malta,” says Norbert Francis Attard, founder of Valletta Contemporary and META Foundation.

As a space run by the non-profit organisation the META Foundation, Valletta Contemporary is an independent exhibition space and art gallery through which both local and international contemporary artists and the general public can express themselves and be inspired.

Very limited tickets are available to attend on the 14th December, so book yours today against a donation to Valletta Contemporary by visiting www.vallettacontemporary.com. Single tickets are priced at €200, while doubles are at €300 for the pair. A company ticket priced at €1,000 will entitle you to invite six employees and two artists - so why not consider the MET[A] Gala for the ultimate, glamorous Christmas party for you and your friends, all in aid of a worthy cause!

A building which goes beyond your expectations Welcome to The Notch Conference Centre, a newly created space to host professional events, boost trade relations, business and networking and act as a catalyst for knowledge. We have taken the expected to the surprising based on the philosophy that an event needs to be brought alive. Our role is to be our customers’ ally, sharing their vision and reinventing ourselves constantly to provide results that meet – and exceed - their expectations.

Our emblematic building is the perfect balance of beauty, functionality and versatility.

Its spectacular façade and entrance are ideal for showcasing your event. The centre’s rooms and auditoria offer infinite versatility for all types of events, whatever their size.

The three-storey building features a foyer, reception area and a multipurpose conference room seating 98 people in theatre style on the ground floor, making it an ideal space for exhibitions or catering events. The conference room, on the first floor, can seat a total of 210 delegates, suitable for large meetings and the opening or closing cere-

monies of events with large audiences. The top floor offers a world of options and essential flexibility with our five break-out rooms, the perfect complement to your event. Transformable and functional space is created by using adjustable soundproof panels, allowing you to create as much space as needed.

Complement your event with the latest state-of-the-art audio visual equipment and a dedicated high speed internet connection.

Raised adjustable flooring provides endless set-up options allowing you to be the mastermind behind the configuration of your event.

On-site parking is also available providing a complete hassle-free experience.

We invite you to come over to view our venues and facilities in order to help you picture your event.

For further information and to book,please contact our dedicated Sales Team on 2138 5926 or events@urbanvalleyresort.com. We will ensure your meetings and events run successfully, every time.