Issue link: https://maltatoday.uberflip.com/i/1216530
3 maltatoday | SUNDAY • 1 MARCH 2020 NEWS CONTINUED FROM PAGE 1 But in answers to MaltaToday, Mus- cat ignored a direct question to disclose the investors mentioned in the com- munication. "The said project has long been on government's cards, and was also ac- tively promoted from the Opposition side. I have been asked by a government entity whether I still have a contact in order to revive it," he said when asked by MaltaToday whether his email to Bouvier was unethical given that he was using information he acquired as PM. Muscat was prime minister when the suggestion was made to the Maltese government to set up an underground maximum-security vault with direct access to the Malta International Air- port runways, offering tax-free storage for precious goods. "I did not demand any contract or payment to do so," Muscat told Malta- Today, who also declared he met Bou- vier twice in his tenure. Muscat also told MaltaToday, when asked, that he has not taken up any di- rectorships in companies. Muscat's exchange with Bouvier illus- trates not just the problems of Malta's lack of revolving doors rules, where a former PM can potentially use contacts acquired during his time in govern- ment for private gain. It also shines a light on why a part- nership with Bouvier himself could be ill-advised for Malta's reputational problems on money laundering. 'Black hole' for billions Bouvier opened Le Freeport in 2010 at a cost of $100 million, turning the Singapore freeport into a regional hub for luxury collectibles such as Chris- tie's International stock, and bullion trading. It held JPMorgan's precious metals, as well as gold for UBS Group, Deutsche Bank and Australia & New Zealand Banking Group. Security checks and body scans are employed at Le Freeport, where ten- ants can have goods delivered to the site directly from planes without hav- ing to pay tax on the goods. Bouvier planned to build a network of freeports in wealthy hotspots around the world. But a lawsuit from art col- lector Dmitry Rybolovlev, who accused him in 2015 of overcharging him $1 billion on the brokerage of canvasses by Gustav Klimt and Rene Magritte, cut short plans for a similar freeport in Shanghai. He remains the majority owner of his Luxembourg Freeport but his Singapore freeport is now said to be up for sale. Bouvier consistently denies all charg- es, arguing that he was an independent seller free to sell Rybolovlev paintings at whatever price the art collector was willing to pay. Secrecy over what was stored in the strong-rooms of Le Freeport led to concern about the possible use of the facility for illicit purposes. With pressure over anti-money laundering checks from the Financial Action Task Force (FATF), a 2016 report painted a damning picture of the facility. In its evaluation of Singapore's money-laun- dering risk awareness, the FATF found that Singaporean authorities did not demonstrate a comprehensive under- standing of what activities were being undertaken in the freeport, raising con- cerns about the prevalence on financial crime behind its doors. By storing art and other valuable items tax-free in hyper-secure ware- houses, freeports like Bouvier's have also been accused of being a storage for looted artefacts. European lawmakers consider free- ports such as those in Luxembourg and Geneva a "new emerging threat" to the EU's fight against money laundering and tax evasion. Earlier this year, 505 members of the European Parliament voted to make the "urgent" phasing out of freeports a top priority, and pol- icymakers are taking concrete steps to eliminate the zones' use as tax havens. The disputes surrounding Bouvier soured policymakers on the idea of freeports. As the TAX3 report noted, the fact that Le Freeport Luxembourg's founder is "entangled in an affair in- volving alleged fraud and insider trad- ing" – and reports that two of Bouvier's business partners at Le Freeport have ties to Corsican organised crime and stolen art – only emphasizes why the EU is keen to phase out the zones as quickly as possible. The Malta Free Zones Act XV of 2019, en- acted in May 2019, enables the minister re- sponsible for Customs to set up a Free Zone Authority vested with enough power to create and manage new Free Zone areas. That means any such area as decided by the minister for the economy, can be des- ignated as a free zone – ideal for such a precious goods store located near Malta International Airport. The intention of the law is to attract in- vestment into Malta's manufacturing and logistics sectors. The Commissioner for Revenue will act as supervisor and con- troller and in some instances as a deci- sion-making body. EU rules allow member states to desig- nate parts of the customs territory of the Union as 'free zones' where goods import- ed from outside the EU would not be sub- ject to import duties, other charges such as VAT, and commercial policy measures, as long as they do not prohibit the entry or exit of goods into or from the EU's customs territory. The law enables authorised undertakings to carry on specific activities linked to the manufacturing and logistic sectors within a Free Zone area to benefit from these ad- vantages. Malta Customs director-general Joseph Chetcuti has gone on record saying the former Air Malta headquarters is the logi- cal site for a free zone. "It is not too different to the bonded warehouse concept – where taxes are suspended unless they are moved into the community. But goods in a bonded ware- house are covered by a bank guarantee, whereas there is no fiscal cover in a free zone," Chetcuti had told The Times. The Customs director supports the idea of a free zone at the former Air Malta head- quarters. "Why not have a fine arts ware- house in a free zone, as some airports do? And you can have a tunnel linking the Freeport, the airport and the logistics hub planned for Hal Far." Muscat says he pitched idea on behalf of government Law for new freeport already in place "I did not demand any contract or payment to do so," Muscat told MaltaToday, who also declared he met Bouvier twice in his tenure Asia's 'Fort Knox': Singapore's Le Freeport