Close call: Abstentions alone save Malta in European Parliament vote on tax haven blacklist

Efforts by socialist MEPs in the European Parliament to declare Malta a tax haven were defeated this afternoon by a majority of MEPs. The amendment tabled by the group to which Malta’s Labour MEPs belong was defeated by a few votes, with 327 MEPs voting in favour, 327 MEPs against and 24 abstaining.

The votes cast in favour of the proposal implies that nearly all S&D Group MEPs voted in favour of the proposal, which would have had severe implications for Malta’s financial services industry, had it been approved. The three Maltese Labour Party MEPs in the Group – Alfred Sant, Miriam Dalli and Marlene Mizzi – had claimed they were against the proposal.

Nationalist Party MEPs David Casa, Roberta Metsola and Francis Zammit Dimech are said to have been crucial in convincing their EPP colleagues as well as MEPs from other political groups, that the people of Malta should not bear the brunt because of the illicit activities of Minister Konrad Mizzi and Keith Schembri.

Labour MEP Alfred Sant, who voted against the resolution, said tax flexibility must remain within the EU.

 “Under the guise of countering shameful tax loopholes and procedures that promote tax evasion and aggressive tax planning, a real and unacceptable aim has been that of introducing tax harmonisation in the EU. Tax flexibility must remain within the Union. The taxation of peripheral countries should not be brought close to that applicable in or around the EU’s golden triangle.”

Sant emphasised that he had no faith in the proceedings that led to this resolution.

“Methodologies followed resemble those of a witch hunt, with leading members of the committee publicly and volubly such as MEPs Langen, Gomes, Giegold, and Tang who took the position of prosecution, witness, jury and judge, while fact finding was often restricted to consulting people or texts that fed their own biases.

“Indeed, resort was eventually had to quoting a report from a lobby group (Oxfam) published post the report of the Pana committee, which presented conclusions that went beyond the committee’s findings. The overall exercise discredits the European Parliament’s claim to serve as a bulwark of fairness and justice in asserting European values.” 

Nationalist MEP David Casa said it was disgraceful that Labour MEPs allowed their political group to table the amendment.

“It shows that when push comes to shove they are capable of a lot of talk and very little else. There were elements within our own group that wanted to support the Socialist amendment,” he said. “Let me be clear. It is because of the phenomenal work of the Partit Nazzjonalista delegation that this amendment did not pass. When Malta’s interests are at stake we are the ones who show our worth. Yes, Malta’s taxation system is competitive – but Malta is no tax haven. Any effort to depict Malta as such will not tolerated.”

Roberta Metsola said it was obvious to all that Malta was under the spotlight again because of the Prime Minister’s continued failure to take any action on Mizzi and Schembri while allowing them to continue to operate with impunity at the heart of government. “It is such a shame to see that the negotiating position of Malta as a country being so badly weakened by the inexplicable and indefensible choice Joseph Muscat continues to make to defend his friends instead of his country,” she said.

“This time we managed, and we will always stand up for Malta, but it will only get more difficult to convince MEPs that we have a robust system when you have people at the top of the administration who were exposed in such a manner. It is a contradiction that will continue to haunt Malta.”

Francis Zammit Dimech said that the European Parliament – and particularly the EPP Group – had reasserted their commitment to stand with the Maltese people, through the vote taken. “Partit Nazzjonalista will continue to work for the protection of all whistleblowers, and will be at the forefront to defend those who reveal corruption or money laundering,” he said.

By a large majority, the European Parliament adopted in plenary the final report and the recommendations of the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA). In the final report, MEPs accused Member States of serious failures in combating money laundering, tax avoidance and tax evasion. In the recommendations, MEPs called on the European Commission and the Member States to amend legislation, take new initiatives for greater transparency and enforce existing legislation.

MEP Sven Giegold, spokesperson of the Greens/EFA group in the PANA inquiry committee accused European governments of assisting tax avoiders and money launderers for decades.

"The Committee of Inquiry has hauled the governments over the coals. Tax avoidance and money laundering have become a threat to social cohesion in Europe. Any government that holds its protective hand over money laundering, tax avoidance and tax evasion is seriously violating its social responsibility. EU countries have covered criminal transactions and in many cases violated EU law. Governments must be brought to justice, their laws must finally be made watertight and the non-transparent practices of money laundering and tax avoidance must be stopped."

"The report is an action plan against tax dumping and money laundering. We should not wait for further tax scandals but we must act now. The European Union must stop supporting money laundering and tax fraud. Lawyers, auditors and tax authorities must be supervised independently."