Undermining the rule of law

The “rule of law” is a basic democratic principle codified in the laws of democratic countries.

We are all servants of the law in order to be free and in a democracy, the law should apply to one and all without exception. A weak “rule of law” thus results in less and less democracy until one is left with only a free-standing façade.

The law is there to be observed: it should be a constraint on the behaviour of individuals as well as on that of institutions. All individuals ought to be subject to the same laws, whereas institutions are there to protect us all, not just from ourselves but also from all possible attempted abuse of authority by the institutions themselves.

It is within this context that the report of the ad hoc delegation of the Committee of Civil Liberties, Justice and Home Affairs of the European Parliament has to be considered. The report is an illustration of how others see the state of our democracy, even though at points it may be inaccurate.

The delegation’s brief was to investigate “alleged contraventions and maladministration in the application of Union law in relation to money laundering, tax avoidance and tax evasion”.

The observations and conclusions of the delegation in its 36-page report are certainly not edifying. The common thread running through the different pages of the report is that in Malta there are more masters of the law than servants; this is how others see us.

In my opinion they are not far off the mark. The report repeatedly emphasises the point that the law should be observed in both letter and spirit.

The institutions in Malta are very weak. I would add that they are weak by design, in other words they are designed specifically to genuflect when confronted by crude political power. This is reflected both in the type of appointees as well as in the actual set-up of the institutions which are supposedly there to protect us.

The above-mentioned report observes, for example, that none of the Financial Intelligence Analysis Unit (FIAU) reports on Maltese politically exposed persons (PEPs) were investigated by the Police, notwithstanding the fact that the said reports had been forwarded to them “for any action the Police may consider appropriate”.

Is it too much to expect that the police do their duty in at least investigating? The fact that no such investigation was carried out drives home the clear unequivocal message that for the police, PEPs are not subject to the law like any other person. The EU Parliament report is very clear as to why such investigations are essential. In fact it is stated that: “Persons perceived to be implicated in serious acts of corruption and money- laundering, as a result of Panama Papers revelations and FIAU reports, should not be kept in public office and must be swiftly and formally investigated and brought to justice. Keeping them in office affects the credibility of the Government, fuels the perception of impunity and may result in further damage to State interests by enabling the continuation of criminal activity.”

The question to be asked is: why is this possible? Why do Maltese authorities tend to bend the rules or close an eye here and there?

You may find an indication as to why this is so in two small incidents occurring in Malta this year. These illustrate the forma mentis of the Maltese “authorities”.

The first example is associated with the fireworks factory at Iż-Żebbiegħ. After 30 years in Court the rural community of iż-Żebbiegħ won a civil case as a result of which a permit for a fireworks factory was declared null and void by the Court of Appeal. The government reacted by rushing through Parliament amendments to the Explosives Ordinance. These amendments with approved by Parliament with the full support of the Opposition. As a result, notwithstanding the decision of the Court of Appeal, a permit for the fireworks factory can still be issued.

The second example is still “work in progress”. The Court of Appeal has, in the application of rent legislation, decided that the Antoine de Paule Band Club in Paola was in breach of its lease agreement. As a result the Court of Appeal ordered the eviction of the band club from the premises they leased within four months.

The government reacted by publishing proposed amendments to the Civil Code, as a result of which the eviction ordered by the Court of Appeal will be blocked.

These are two examples of the government reacting to decisions of our Courts of Law by moving the goalposts – with the direct involvement of the Opposition. The public reactions to these two cases have been minimal. Maltese public opinion has become immune to such “cheating” and bending of the rules because this method of operation has become an integral part of the way in which our institutions function. The Opposition is an active collaborator in this exercise that undermines the rule of law in Malta.

Is it therefore reasonable to be surprised if this “cheating” and bending of the rules is applied not just in minor matters but in very serious ones too? Moving the goalposts whenever it is politically expedient is, unfortunately, part of the way in which this country has operated to date. It is certainly anything but democratic and most obviously anything but respectful towards the rule of law.

published in The Malta Independent on Sunday : 20 May 2018

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Id-demmiela fi Triq Żgħawri L-Munxar

 

Mela mill-Munxar hemm applikazzjoni (PA2406/18) quddiem l-Awtoritá tal-Ippjanar biex f’razzett eżistenti tkun żviluppata demmiela li tiġbor fiha d-demel minn numru ta’ irziezet.

Issa dan ir-razzett fejn iridu jagħmlu din id-demmiela huwa viċina ħafna taż-żona residenzjali.

Mhux biss.

Imma xi snin ilu kienu intefqu ammont sostanzjali ta’ fondi Ewopej (qaluli madwar €500,000) biex Triq Żgħawri tkun “upgraded” minħabba li kienet qed tiġbed ħafna nies għal mixjiet fil-kampanja. (ara ritratt) Il-fondi ġew mill-European Agricultural Fund for Rural Development : Axis 3, Improving the Quality of Life in Rural Areas!

L-applikazzjoni għadha fil-bidu u bħalissa qed niġbor l-informazzjoni għax ġejt mitlub minn xi residenti tal-Munxar ħalli nippreżenta oġġezzjoni f’isimhom quddiem l-Awtoritá tal-Ippjanar.

Id-demmiela mhux postha fi Triq Żgħawri. Jekk ifittxu sew bla dubju jsibu post addattat li ma jagħti fastidju lil ħadd.

Bomba tal-ħin jisimha Pilatus

Il-kwistjoni tal-bank Pilatus Bank għandha l-potenzjal li tkun il-kawża ta’ ħsara li tmur lil hinn minn dik lir-reputazzjoni tal-pajjiż.

Iktar kmieni din il-ġimgħa kien żvelat li ċ-Chairman tal-Bank Pilatus Ali Sadr Hasheminejad bħala riżultat ta’ investigazzjonijiet li kienu ilhom għaddejjin madwar sitt snin kien arrestat fl-Istati Uniti tal-Amerika u akkużat li pprova jdur mas-sanzjonijiet Amerikani kontra l-Iran billi uża banek Amerikani ħalli jittrasferixxi miljuni ta’ dollari mill-Venezwela b’mod li ħeba l-konnessjoni Iranjana.

Ġejna infurmati li dawn l-akkużi, jekk ippruvati, jistgħu jwasslu sa massimu ta’ 125 sena l-ħabs.

F’temp ta’ ftit siegħat, nhar il-Ħamis, hekk kif ħarġet l-aħbar, l-Awtoritá Maltija tas-Servizzi Finanzjarji (MFSA) neħħiet lil Ali Sadr Hasheminejad mit-tmexxija tal-bank Pilatus, inkluż li ssospendiet d-drittijiet kollha tiegħu fuq il-bank u mbagħad ipproċediet biex ħatret amministratur bl-inkarigu li jmexxi l-bank u jieħu ħsieb l-assi kollha tiegħu. Dan sar wara li MFSA tat direzzjoni li l-bank ma kellux jiddisponi minn, jillikwida, jittrasferixxi jew b’xi mod imiss l-assi u l-flus tal-klijenti tal-bank.

Issa sirna nafu ukoll li x-xahar li għadda l-Awtoritá Ewropeja dwar il-Banek (European Banking Authority) kienet ordnat li tinbeda investigazzjoni preliminari dwar is-supervizjoni tal-bank Pilatus mill-Awtoritá Maltija tas-Servizzi Finanzjarja u b’mod partikolari dwar il-verifiki li kellhom isiru in konnessjoni mal-kapital inizzjali ta’ €8 miljuni li Ali Sadr Hasheminejad uża biex waqqaf il-bank.

Damu ftit jaħsbuha!

Bosta minna jiftakru lil Ali Sadr Hasheminejad ħiereġ mill-uffiċini ta’ Pilatus f’Ta’ Xbiex tard fil-għaxija, jum fost l-oħrajn, bil-kameras tat-TV jiġru warajh u bil-gurnalisti jfajjru l-mistoqsijiet. Kienu qed jistaqsu jekk fil-bagalji li kellu kienx hemm xi dokumenti tal-bank konnessi mal-kontroversja dwar min kienu is-sidien ta’ Egrant inkella dwar it-trasferimenti ta’ flejjes minn uħud mill-kontijiet tal-bank.

Ir-Repubblika tal-Azerbajġan ilha ftit turi interss f’kooperazzjoni ma’ Malta. Ta’ interess f’dan is-sens kienet stqarrija ta’ 127 kelma li ħarġet lejn tmiem Diċembru tal-2014 li ħabbret li kien ġie iffirmat ftehim bejn Konrad Mizzi, dakinnhar Ministru tal-Enerġija ta’ Malta u l-kontro-parti tiegħu Natiq Aliyev kif ukoll ftehim ieħor mal-kumpanija statali taż-żejt tar-Repubblika tal-Azerbajġan (SOCAR). La l-istampa Maltja ma kienet hemm u l-anqas ma kien hemm uffiċjali pubbliċi jassistu lid-delegazzjoni Maltija mmexxija mill-Prim Ministru Joseph Muscat. Dakinhar kulħadd kien staqsa “għaliex ?”

F’dan l-isfond ma nafx liema hu dak il-pajjiż li jista’ jżomm ir-reputazzjoni tiegħu intatta!
Bħalissa għaddejjin diversi investigazzjonijiet, lkoll bil-pass ta’ nemla. F’xi ħin, nittama li mhux il-bogħod, kapaċi naraw il-biċċiet jingħaqdu fi stampa waħda li tkun ċara u li tinftiehem minn kulħadd.

Kull investgazzjoni mitmuma, kull rapport konkluż, tnaqqas it-tul tal-miċċa ta’ din il-bomba tal-ħin. Nittama biss li meta din il-bomba tal-ħin tieħu teqred biss lil dawk li ħolquha jew lil dawk li qagħdu jitbissmu lil dawk li ħolquha. Sfortunatament il-ħsara tinfirex.

Ippubblikat fuq Illum : Il-Ħadd 25 ta’ Marzu 2018

 

It-tieġ ta’ Venezja u l-ħasil tal-flus

 

Diversi qed jistaqsu għalfejn dan l-għaġeb kollu dwar min attenda għat-tieġ li sar Venezja fejn iżżewweġ dak li sa ftit ġranet ilu kien iċ-Chairman u s-sid tal-bank Pilatus, Ali Sadr Hasheminejad.

Kull wieħed minna għandu l-obbligu li joqgħod attent biex dak li jagħmel fil-ħajja privata tiegħu jew tagħha ma jirriflettix ħażin fuq il-ħidma pubblika tiegħu jew tagħha. Biex inkun ċar, meta ngħid il-ħidma pubblika mhux qed nillimita ruħi għall-politiċi.

Sfortunatament għal bosta sar qiesu xejn m’hu xejn.

L-arrest fl-Istati Uniti tal-Amerika ta’ Ali Sadr Hasheminejad sar il-ġimgħa l-oħra. Kien arrest dwar ksur tal-liġijiet Amerikani fuq is-sanzjonijiet kontra l-Iran.

Imma kien ix-xahar l-ieħor li l-European Banking Authority fetħet inkjesta preliminari dwar is-sorveljanza li l-MFSA għamlet fuq il-bank Pilatus u b’mod partikolari dwar id-due diligence meħtiega biex ikun stabilit is-sors tat-€8 miljuni kapital inizzjali biex fetaħ il-bank.

L-issue tal-ħasil tal-flus ilha tissemma xhur sħaħ fil-konfront tal-bank Pilatus.

Il-mistoqsija allura li teħtieġ tweġiba hi dwar jekk kienx hemm preżenti għal dan it-tieġ f’Venezja persuni li x-xogħol tagħhom ta’ kuljum jikkonċerna s-sorveljanza kontra l-ħasil tal-flus.

Biex inkun l-iktar ċar possibli ħa nikkwota ir-rapport ta’ Lovin Malta li ġie ippubblikat il-bieraħ il-Ħadd 25 ta’ Marzu 2018. Jgħid hekk :
“Also present at Ali Sadr’s wedding was Juanita Bencini, a consultant at KPMG – the auditors of Pilatus Bank. Bencini is President of the Institute of the Financial Services Practitioners and chairs the IFSP’s Prevention of Money Laundering And Funding Of Terrorism committee. She is also board member of the government’s finance promotional arm FinanceMalta and chairs the anti-money laundering committee of the Malta Institute of Accountants.

She was accompanied to the wedding by her husband Austin Bencini, who sits on the board of directors of Allied Newspapers – which owns The Times of Malta.”

Ikun interessanti ħafna jekk inkunu nafu x’taħseb l-MFSA dwar dan. U kif qegħdin fiha l-korpi professjonali tal-accountants u l-awdituri jistgħu jilluminawna ftit ukoll!

L-etika professjonali fejn hi?

 

A time-bomb called Pilatus

The Pilatus Bank saga has the potential to develop into much more than damage to the country’s reputation. 

Earlier this week it was revealed that Pilatus Chairman Ali Sadr Hasheminejad was, as a result of investigations spanning the past six years, arrested in the United States on charges that he evaded US-Iran sanctions by moving millions of dollars from Venezuela through US banks using a network of banks in order to conceal the Iranian connection.

We were informed that if the charges are proven a maximum sentence of 125 years behind bars is at stake.

Over a number of hours  on Thursday, the MFSA removed Ali Sadr Hasheminejad from the Pilatus Chairmanship, stripped him of all authority over the bank – including the suspension of his voting rights – and then proceeded to appoint an administrator to take charge of the bank and its assets. It further directed the bank “not to dispose, liquidate, transfer or otherwise deal with clients’ assets and monies”.

At the same time, the media informed us that last month the European Banking Authority ordered a preliminary inquiry into the Malta Financial Services Authority’s supervision of Pilatus Bank. In particular, this should be dealing with the due diligence checks of the €8 million initial capital which Ali Sadr Hasheminejad used to set up the bank. Is it not about time that such an inquiry is held?

Most of us do remember Ali Sadr Hasheminejad leaving Pilatus offices in Ta’ Xbiex late one evening last year, moving heavy luggage towards his parked car. He was being filmed by a television crew and questioned as to whether he was removing any bank documents from the bank’s vaults in the wake of the Egrant ownership allegations as well as in view of leaked information as to the ownership of a number of accounts held at Pilatus Bank and the transfers carried out to and from such accounts.

The involvement of the Azerbaijani dynasty in a number of matters adds further spice to the developing stories.

Coincidentally, the Azerbaijani Republic is interested in cooperation with tiny Malta. Of interest in this respect is a 127-word statement issued late in December 2014 announcing the signing of a Memorandum of Understanding between Dr Konrad Mizzi, at the time Malta’s Energy Minister, and his counterpart Natiq Aliyev, as well as a further Memorandum with the State Oil Company of the Azerbaijan Republic (SOCAR). The Maltese press did not cover the event and,  moreover, no Maltese civil servants were present to assist the Maltese delegation led by Prime Minister Joseph Muscat. Everyone had queried this at the time.

This is part of the background which, even if its individual bits were unrelated, is sufficient to blow to smithereens any country’s reputation.

Various investigations are currently in the pipeline, albeit moving at a snail’s pace. At some point in time, hopefully not too distant, we may be able to see which parts of the jigsaw puzzle fit together.

Each investigation concluded, and each report published, shortens the fuse of this time-bomb. It can only be hoped that when this time-bomb goes off it will only destroy those who created it – or who watched its development in awe. Unfortunately, the collateral damage will, inevitably, be substantial.

published in The Malta Independent on Sunday – 25th March 2018

Il-proposta dwar l-abort

 

Il-pubblikazzjoni mill-Fondazzjoni għad-Drittijiet tan-Nisa ta’ dokument li jipproponi strateġija nazzjonali dwar is-saħħa sesswali hu pass il-quddiem f’dan il-pajjiż. Fid-dokument, intitolat Women’s Sexual & Reproductive Health & Rights, il-fondazzjoni tagħmel 7 rakkomandazzjonijiet dwar il-kontraċezzjoni, l-ippjanar tal-familja, l-edukazzjoni sesswali u l-aċċess legali u sigur għall-abort.

Min-natura tagħhom dawn huma proposti kontroversjali li jeħtieġu diskussjoni matura li hi tant nieqsa f’dan il-pajjiż.

Meta f’Settembru li għadda, fl-ewwel indirizz tiegħi bħala Chairman ta’ Alternattiva Demokratika kkummentajt dwar dak li kien ġie diskuss fil-Parlament taż-Żgħażagħ ftit qabel u għidt li l-pajjiż jeħtieġlu diskussjoni serja u matura dwar l-abort kien hemm min staqsieni “għaliex dan”? Din id-diskussjoni ma hemmx bżonnha, kien hemm min qal.

It-tweġiba għal dan hi waħda sempliċi: għax aħna niffurmaw parti minn pajjiż demokratiku u l-politika tal-pajjiż, inkluż dik dwar is-saħħa sesswali u reproduttiva hi suġġetta għall-iskrutinju pubbliku. Ħadd m’għandu l-ebda dritt li jagħlaq ħalq ħadd billi jostakola diskussjoni. Għandna bżonn iktar diskussjoni pubblika u inqas tkeskis u tfesfis fil-widnejn.

Bla dubju din hi diskussjoni li ser tkun waħda emottiva u ser tirrifetti l-fatt li l-pajjiż għaddej minn trasformazzjoni radikali fejn il-pluraliżmu qiegħed bil-mod il-mod jinfirex fl-oqsma kollha tal-ħajja inkluż fl-etika u l-valuri li nħaddnu.

Din hi bidla li ħadet spinta bid-dħul ta’ Malta fl-Unjoni Ewropea. Għax fl-2004 ma bqajniex iktar gżira iżda sirna parti effettiva mill-kontinent Ewropew. Dan ġieb u għad irid iġib tibdil li jingħoġob imma ukoll tibdil li jdarras.

Mela ħalli d-diskussjoni tibda bis-serjetá.

Making hay …….. in St George’s Bay

The 23-storey Pender Gardens high-rise is nearly completed, after nearly 10 years of continuous construction activity. The application for the 31-storey Mercury House was approved last month and next Thursday, the Planning Authority Board will consider planning application PA2478/16 submitted by Garnet Investments Limited in respect of a substantial stretch of land along St George’s Bay on the outskirts of Paceville St Julian’s.

The applicant has requested the following: “Demolition of all existing buildings forming part of St. George’s Bay Hotel and ancillary facilities, Dolphin House, Moynihan House and Cresta Quay. Construction of Parking facilities, Hotels and ancillary facilities, Commercial Area, Multi Ownership holiday accommodation, Bungalows, Language school with accommodation. Restoration of the Villa Rosa and upgrading of the facilities including parking facility, kitchen and toilets all below existing site levels within the Villa Rosa Area to address catering facilities/wedding hall.”

The project includes mixed-uses covering a total site area of 48,723 square metres, a building footprint of 18,345 square metres and a total gross floor area of 82,917 square meters.

It is a small part of the area that was tentatively tackled by a draft Masterplan for Paceville which, after being rejected by public opinion was sent back to the drawing board. I consider it highly unethical for the Planning Authority to proceed with considering this application after the clear and resounding verdict of public opinion. As a minimum, the consideration of this application should have been postponed until a new, reasonable and acceptable Masterplan has received the go-ahead. A minimum effort at achieving consensus as to what development is acceptable is essential.

The Planning Authority is unfortunately insensitive to public opinion. It is amply clear that it, and those who appoint most of its Board members, are on the same wavelength as the development lobby, which is hell-bent on making hay while the sun shines. At this point in time, it is the turn of the St George’s Bay area.

The project is obviously recommended for approval in the 43-page report from the Planning Directorate.

The basic point of contention with such large-scale projects is that they are considered in isolation. Most of them would never get off the drawing board (real or virtual) if the consolidated impact of all neighbouring projects (existing or in the pipeline) are taken into account. Earlier this week, I had the opportunity to address similar concerns to the EIA public consultation on the db Group ITS site project.

Five large-scale projects are earmarked for St George’s Bay. Each will generate considerable havoc from excavation throughout construction and right through operation in the whole St George’s Bay area. Cumulatively it will be hell. Who cares?

Way back in 2006, when the Strategic Environmental Assessment Directive of the EU was about to be implemented in Malta, the Lawrence Gonzi – George Pullicino tandem rushed through the approval of the Local Plans in such a manner as to ensure that the accumulated environmental impact resulting from their implementation was not scrutinised and acted upon. The present state of affairs is the direct result of that irresponsible Gonzi-Pullicino action 12 years ago.

The Environment and Resources Authority (ERA) occasionally tries to patch things up. For example, within the framework of the ITS EIA exercise ERA suggested that the traffic assessment of the ITS and the Villa Rosa projects be consolidated. This has, however, been avoided: a case of too little, too late.

So where do we go from here?

The development lobby is maximising its efforts to make hay while the sun shines. In reality, a consolidated mess is taking shape with massively built-up areas in a relatively restricted space punctured by high rises mimicking phallic symbols of all shapes and sizes spread all over the place. Pender Place has 23 floors. Mercury House will have 31. The ITS phallus will have a 37-floor residential tower. The Villa Rosa/Cresta Quay project will have more modest heights.

Next Thursday, the Planning Authority has the opportunity to scrutinise the proposal for this Villa Rosa-Cresta Quay project. We will see once more the extent to which the concrete lobby still holds the Authority by its balls – obviously where this is applicable.

 

published in The Malta Independent on Sunday – 18 February 2018

Karmenu Vella and the plastic tax

Karmenu Vella, EU Commissioner for the Environment, is enthusiastic about the possibility of a plastic tax being introduced throughout the EU. In his view, this tax – if properly designed – could be one of a number of tools for delivering environmental objectives as well as providing budgetary income. Planet Earth is drowning in plastic.

Vella made these comments in an interview published on Euractive last week on the subject of the EU’s new plastics strategy.

We have been there before and maybe it is time to consider the matter once more in Malta. Some 10 years ago in Malta we had an environmental tax which was known as an “eco-contribution”. It was a valid proposal, badly designed and arrogantly implemented. The lessons learnt from that exercise could, if properly analysed, lead to the development of effective policy tools addressing the generation of waste in the Maltese islands. Policies should be well thought out and not developed as a result of panic – as is clearly the case with the current government incineration proposal.

Ten years ago, the eco-contribution tried to address the generation of plastic waste including “single-use plastic”. This is one of the primary targets of the EU plastics strategy published on the 16 January.

Its title is very clear : A European Strategy for Plastics in a Circular Economy. Plastic is ubiquitous: it is present in all aspects of our economy and our daily lives. The plastics we use must be such that they can be re-used rather than thrown away. It is an important resource which can be put to good use rather than thrown away or incinerated.

It is for this purpose that the newly-published plastics strategy lays the foundations for a new plastics economy where “the design and production of plastics and plastic products fully respect reuse, repair and recycling needs and more sustainable materials are developed and promoted”.

A plastics economy would definitely not send “waste plastic” to the incinerator to be converted into energy. Even Malta’s latest version of the Waste Management Strategy, approved in 2014, emphasises that our approach to waste must be one based on the sustainable use of resources and, in line with the EU waste hierarchy, gives priority to recycling over incineration.

In fairness, it has to be said that our government’s advisors on incineration have already sounded the alarm. Apparently this has not, as yet, been understood – either by the government or by the Opposition. It would be pertinent to point out that the Special Assignment Report by Jaspers dated 23 February 2017 on a Waste to Energy (WtE) project in Malta specifically emphasises that “it would be difficult to justify a WtE facility that is not based on low waste growth and high recycling”.

Rather than talking about incineration, it is about time we discussed in detail the implementation of our Waste Management Strategy in order to identify why it has not to date succeeded in increasing Malta’s recycling rates. What initiatives need to be taken in order that the waste generated in Malta is minimised?

Malta’s waste management strategy, now complemented by the EU’s Plastic Strategy, is definitely a much better roadmap than the documentation encouraging incineration. And what about our commitments to encourage a “circular economy” : gone with the wind?

Karmenu Vella’s plastics tax is food for thought.

It is about time that Wasteserve is managed properly. As a first step, it should stick to its brief and seek to implement carefully the Waste Management Strategy, which establishes the year 2050 as the year when we should achieve a “Zero Waste Target”. This target will not be achieved through the use of incineration but through a policy encouraging waste minimisation as well as recycling.

This is not just a task for the Minister responsible for the Environment. The Minister responsible for the Development of the Economy also has a very important role to play in achieving a successful implementation of the Waste Management Strategy.

Unfortunately he is apparently completely absent.

Zero waste municipalities in Europe are continuously indicating that an 80 to 90 per cent recycling rate is achievable. The fact that Malta’s recycling rate is, at best, estimated at around 12 per cent, is a clear indication that there is room for substantial improvement – with or without Karmenu Vella’s plastics tax.

Published in The Malta Independent on Sunday 28 January 2018

 

Encouraging the avoidance of paying tax

The issue as to whether or not  Malta is a tax haven has been brought to the fore once again, as a result of the amendment to the Panama Papers Inquiry Report discussed in the European Parliament earlier this week. The defeated amendment would have seen Malta, Luxembourg, Ireland and the Netherlands labelled by the European Parliament as “tax havens”.

The matter is much more complex. On the one hand it involves tax competition and on the other hand it is a matter of justice in taxation matters.

As has been repeatedly stated, competition on taxation matters is one of the few areas in which small, as well as peripheral, countries in the European Union have a competitive advantage. Alternattiva Demokratika-The Green Party is not in favour of loosing this competitive advantage through tax harmonisation in the EU. However, it has to be used in a responsible manner.

The rules permitting the refund of a substantial amount of tax paid by foreign-owned companies based in Malta is one of the main reasons for the current spotlight. This substantial tax refund effectively reduces the tax paid by such companies from 35% to five per cent and is obviously considered very attractive by a number of companies. The basic question that requires a clear answer is how many of these companies are letter-box companies, that is companies which do not have any part of their operations on Maltese soil?

It would be reasonable to encourage companies to base part of their operations in Malta and, as a result, make use of tax advantages. But in respect of those companies which have not moved any part of their operations to Malta, making use of beneficial taxation arrangements is unreasonable and unjust. It leads to such companies avoiding paying tax in the countries in which they create their profits and consequently avoiding their social responsibilities on paying taxes in the countries that are providing them with the very facilities which make it possible for them to create their wealth.

In a nutshell, Malta is providing these companies with the legal framework to avoid their taxation responsibilities in the countries in which they operate through payment of a fraction of these taxes to the Maltese Exchequer. They pocket the rest.

Hiding behind the EU unanimity rule on tax issues will not get us anywhere, as Ireland has learnt in the Apple case. At the end of the day, the situation is not just about  taxation: it also involves competition rules and rules regulating state aid, as the legal infrastructure encouraging the avoidance of taxation is, in effect, a mechanism for state aid. The is also an issue of tax justice, as a result of which tax should be paid where the profits are generated.

Tax competition has a role to play as an important tool that small and peripheral countries in the EU have at their disposal. No one should expect these countries, Malta included, to throw away the small advantage they have, but it should be clear that this should be used responsibly and in no way should it buttress the urge of multinationals to circumvent the national taxation system in the country where their profits are generated.

Profits should be taxed where they are actually generated and not elsewhere. The EU needs to end – once and for all – not only tax evasion but also tax avoidance resulting from loopholes in national taxation rules. For this to happen, the EU member states must not only be vigilant, but they must also refrain from encouraging tax avoidance through the creation of more loopholes.

Tackling tax evasion and tax avoidance seriously will mean that taxes are paid where they are due, thereby funding the services and infrastructure that is required in a modern, civilised society. This can only happen if more companies pay their dues.

Tax competition need not be a race to the bottom.

published in The Malta Independent on Sunday : 17 December 2017

Sven Giegold tkellem dwar il-preokkupazzjoni tagħna lkoll

Il-Membru Parlamentari Ewropew Sven Giegold, mill-Grupp tal-Ħodor, Ġermaniż,  ġie Malta ippreokkupat dwar is-saltna tad-dritt f’Malta. B’dak li sema’ kemm dam hawn spiċċa ippreokkupa ruħu ferm iktar.

Fuq il-blog tiegħu stess, fil-fatt jgħid hekk: 

“The delegation of the Parliament came seriously concerned over the rule of law in Malta and left even more worried. We learnt a great deal, gathered important evidence and were promised even more.

The police and the attorney general have demonstrated an unwillingness to investigate and failure to prosecute corruption and money laundering.”

X’qalulhom mela, biex tawhom din l-impressjoni ħażina.

Sven Giegold ikompli jgħid :

“Publically available information and even reports by Malta’s anti-money laundering body FIAU have repeatedly not triggered investigations. Individuals and financial institutions involved were not searched, evidence not gathered. This protected high government officials such as prime minister’s chief of staff Keith Schembri and minister Konrad Mizzi from prosecution as well as financial instiutions such as Pilatus Bank and Nexia BT.”

Bħalna lkoll Sven Giegold ifforma l-opinjoni li r-rapporti tal-FIAU ġew injorati. Jidher li wasal għall- konklużjoni li ma saret l-ebda investigazzjoni dwar il-kontenut ta’ dawn ir-rapporti. Għax kieku saret investigazzjoni u din waslet għall-konklużjoni li ma kien hemm xejn minn dak li jintqal fir-rapporti, nimmaġina li l-Kummissarju tal-Pulizija kien jgħidlhom lid-delegazzjoni tal-Parlament Ewropew li “investiga u ma sab xejn”.

Imma ma jidhirx li intqal dan il-kliem għax il-konklużjoni ta’ Giegold, liema konklużjoni taqbel magħha Ana Gomes is-Soċjalista Portugiża li qed tmexxi d-delegazzjoni, hi ċara daqs il-kristall :

“Publically available information and even reports by Malta’s anti-money laundering body FIAU have repeatedly not triggered investigations.”

Din hi l-preokkupazzjoni tagħna lkoll: li l-istituzzjonijiet qegħdin hemm għalxejn.