Bigger than the election

What happened yesterday is the game-changer we were hoping would never happen. Forget the extremely hot election fever, the mammoth mass meetings, the wallto-wall coverage of the elections on the party stations. As from yesterday, Malta is under attack –

ngrima@independent.com.mt

It is no joke to be attacked as a ‘pirate island’, among other epithets. The Malta Files investigative project was undertaken by the network European Investigative Collaborations (EIC), which has brought together 13 media and 49 journalists in 16 countries and 12 languages.

Tens of stories were published in Belgium, Italy, Portugal, Spain, Germany, France, Serbia, the Netherlands and Croatia, all condemning Malta’s position.

It was claimed that Malta was harbouring firms linked to the Italian mafia, Russian loan sharks and the highest echelons of the Turkish elite.

This is not the first time that Malta has been attacked as an offshore jurisdiction, but never so massively. Over the last three months, the EIC dug into over 150,000 documents that show how international companies take advantage of this system. Malta operates a tax system whereby companies pay the lowest tax on profits in the EU – only five per cent. Although benefiting from the advantages of EU membership, Malta also welcomes large companies and wealthy private clients wanting to dodge taxes in their home countries.

This damages the budgets of other EU-countries and reveals a weakness in the European Union that allows member states sovereign rights over their taxation.

Around half a million names from some 60 countries are cited in the files. L’Espresso said it will be publishing the names, saying politicians and individuals linked to the Mafia were involved.

Among the reports carried overnight, the Malta Files say the son-in-law of Turkish President Recep Tayyip Erdoğan, Berat Albayrak, helped establish an offshore structure in Malta and Sweden to evade millions of dollars in taxes for his company – Turkey’s massive energy, textile and construction group conglomerate Çalık Holding.

Another report explains how Fashion TV investor and Russian billionaire Oleg Boyko and his Latvian partners use Malta as a tax haven for operations in Europe and the US while earning vast profits from emergency loans to Europe’s “poorest and most vulnerable citizens”.

As reported in a leader in The Malta Independent Daily this week, there have been harbingers of this over the past few days. First there was the Finance Minister of the state of the German state of North Rhine Westphalia, Norbert Walter Borjans, who claimed that of some 70,000 offshore companies in Malta, some 2,000 are German companies – an assertion that made the German minister say that Malta was “a sort of Panama in the Mediterranean”.