Panama Papers: MEPs travel to Malta

Parliament's committee of inquiry into the Panama Papers scandal has this week sent an MEP delegation to Malta.

Parliament's committee of inquiry into the Panama Papers scandal has this week sent an MEP delegation to Malta | Photo credit: Press Association

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

20 Feb 2017

Members from Parliament's committee of inquiry into money laundering, tax avoidance and tax evasion (PANA) were in the country on Monday for the second of four fact-finding missions focusing on tax havens. 

The MEP delegation to Valetta comes against the backdrop of fresh media revelations at the weekend that Keith Schembri, the chief of staff of Malta's Prime Minister, and Maltese government minister Konrad Mizzi, had been in the process of setting up bank accounts with the Winterbotham Merchant Bank in the Bahamas when the Panama Papers were published. 

Based in the Cayman Islands, the Winterbotham Merchant Bank provides financial, fiduciary, administrative and accounting services.


Malta was implicated in the Panama Papers scandal after it was revealed last year that Mizzi and Schembri were found to have a secret offshore shell company registered in Panama under a scheme operated by Panamanian-based law firm Mossack Fonseca, the company at the centre of the affair.

During their Malta trip, MEPs say they will focus on the country's compliance with EU legislation on money laundering and taxation.

Malta is widely considered to be a tax haven for foreign companies that use loopholes to avoid tax and shift their profits outside the EU. The country's financial services systems is said to allow the involvement of intermediary companies in the setting up of offshore companies in secrecy jurisdictions that include EU blacklisted countries.

At the same time, the Maltese government continues to resist the European Commission's proposal for member states to share tax-related information on multinational corporations operating in the EU.

The delegation to Malta includes Portuguese MEP Miguel Viegas, who said, "It's unsurprising that the EU institutions have been trying to block the work of this inquiry committee. 

"It shows that we were right: tax evasion and avoidance exist due to the 'instruments' that were put in place by the right-wing and social democrat governments in EU member states. Their purpose? To protect the rich and make them even richer."

The GUE/NGL group deputy added, "Unfortunately Malta is no exception. This delegation will have the opportunity to hear from the Maltese minister of finance, who had declined to appear before our committee."

Speaking before leaving for Malta he said, "We will learn more about the role of Malta in helping large companies avoid taxes while workers continue to suffer from austerity policies." 

Further comment came from Fabio De Masi, a Vice-Chair of the committee, who said, "With a corporate tax rate of just five per cent and an almost 100 per cent tax refund for shareholders, Malta has one of the most lenient corporate tax regimes in the EU, which in turn facilitates the laundering of criminal money.”

"In the past, Malta has lobbied the Council against efforts for more corporate transparency and against stricter anti-money laundering rules. In a country where political elites - from conservatives to the social democrats - have featured so prominently in the Panama Papers. 

"The Maltese government should expect tough questioning from the public on money laundering and tax dodging during the current EU Presidency," De Masi said.


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