Issue link: https://maltatoday.uberflip.com/i/640308
maltatoday, SUNDAY, 14 FEBRUARY 2016 17 THE flipside to popular concerns on the scale of nepotism and cor- ruption in Maltese public life, is the role the island plays in facilitat- ing international graft: a fact that is delightfully ignored by many. Whether it is the government's foreign policy choices, or the fi- nancial services industry helping multinationals avoid high tax in the country they make their prof- its in, Malta helps plays a part in a global pattern of corruption. Europe tends to be home to the world's least corrupt countries, but these clean records don't mean they are not linked to corruption elsewhere. Sweden for instance enjoys the third 'least corrupt' ranking ac- cording to Transparency Interna- tional, but its government owns 37% of telecoms firm TeliaSonera, which is alleged to have paid mil- lions of dollars in bribes to secure business in Uzbekistan, which comes in at 153rd in the index. Malta's sovereign links to such acts are far less tangible, but there is no mistaking the fact that its financial services industry has of- fered a safe haven to kleptocrats abroad to park their riches. Nothing is more glaring in this case than that of Africa's rich- est woman, billionaire Isabel dos Santos, whose father José Eduardo dos Santos is the corrupt and au- tocratic President of Angola, the country he has ruled for 35 years. As kids starve – Unicef figures show this oil-rich nation is ranked No. 1 in the world for children dy- ing before the age of five – billions of dollars are stashed away by the Santos elite. The proof? Malta's beneficial tax regime for foreign companies means multi-millionaires use the island's financial services to house their holding companies. Why would Angola's state-owned diamond company, Sodiam, set up a subsidiary company in Malta, 5,000 kilometres away from Luan- da? And why does this subsidiary Victoria Holding, have as its other owner Melbourne Investment BV, a company owned by Sindika Dokolo, the husband of Isabel dos Santos? Forbes magazine says that Dos Santos, 43 and valued at $3 billion, has built her wealth by "taking a chunk of a company that wants to do business in the country or from a stroke of the President's pen that cuts her into the action." Critics like the human rights ac- tivist and journalist Rafael Marques de Morais says the proven partner- ship between Dos Santos, Dokolo and Sodiam "amounts to a flagrant case of conflict of interest" and that it is illegal under Angolan law. "Her father, the President of the Republic, appoints the board of Sodiam and, as head of the execu- tive, is entitled to give them in- structions. As such, the law forbids him from using his position for the enrichment of his family. This is the reason why such a partnership is not recognized in Angola, and does not appear in the books of Sodiam, but in Malta only. "In the near future, the President might be prosecuted for this case, for corruption and diversion of state resources, such as diamonds, for the illicit enrichment of his family. The family can no longer hide the ill-gotten riches through shell companies based in Malta." Even more recently, Dos Santos acquired a 65% stake in Portugal's energy company Efacec Power So- lutions – a deal worth over €194 million – through another of her Maltese companies, Winterfell In- dustries. The deal was made possible be- cause her father signed a state or- der in August 2015, approving that the Angolan state energy company ENDE acquires 40% of his daugh- ter's company Winterfell Indus- tries – which has a share capital of €80 million. The other 60% owner of Winter- fell Industies is Isabel dos Santos's own company, Niara Holding. The other directors of Winterfell Industries include Noel Buttigieg Scicluna, the former Nationalist MP who is also a director on sev- eral other Dos Santos firms, such as Victoria Holding. Buttigieg Scicluna, sen- ior consultant at EMD Advocates, has told Mal- taToday in the past that Winterfell's structures are transparent and all relevant information is publicly available. "This is the hallmark of Malta as a jurisdiction. The companies pay the taxes they are obliged to pay and file their financial statements that are also professionally audited, all as required by law." Of course, Dos Santos is no dif- ferent from inventor Sir James Dy- son, who in 2010 transferred his shares to a Maltese company but is now relocating it to the UK after paying over €100 million in taxes. Or chicken restaurant Nando's, which uses its Malta company to legally lower its UK corpora- tion tax bill, and energy provider Npower, whose Malta subsidiary is Scaris International. "All this is in line with the vision that the country's strategic lead- ers had when launching Malta as an international financial services centre," Buttigieg Scicluna had said. "So querying precisely why international operators respond to this strategy and set up in Malta seems counterintuitive and, quite frankly, does not appear to be in the country's best interests." Azerbaijani interests Malta also hosts Azerbaijan's state oil company (SOCAR) since 2007 thanks to its favourable tax regime. In Malta, Socar Trading Holding Ltd (STHL) acts as the parent company to SOCAR Trad- ing SA in Geneva, from an office in Ta' Xbiex. In Geneva, SOCAR sells oil from its own trading companies. In 2013, its €38 billion sales left a gross profit of $135 million, which was whittled down to €29 million after salaries, administrative ex- penses and banking costs. In Malta, SOCAR also owns So- car Oil & Gas International Hold- ing. Under Maltese tax rules, the benefits are evident: dividends paid out to foreign shareholders are taxed at 35% income tax, but then get an 85% refund on that tax. More crucially, Malta has bound itself to an 18-year supply of gas that will be facilitated by SOCAR itself, a partner in the Electrogas consortium constructing a new 200MW natural gas power plant at Delimara. While Malta will benefit from the smooth trade of gas from Azerbaijan, the government that owns SOCAR suppresses demo- cratic secular opposition, the inde- pendent media and civil society at home. News 2123 4710 www.mita.gov.mt For further information, contact the Finance and Contracts Department The above tenders are obtainable from the Electronic Public Procurement System (www.etenders.gov.mt) - Provision of Electrician Services – T013/16 Issued on: 9 February 2016 / Closing on: 9 March 2016 Submissions for this tender will be received till 12.00pm in the tender box at Gattard House, National Road, Blata l-Bajda MITA NOTIFIES THAT OFFERS WILL BE RECEIVED FOR: Invitation to TENDER - Provision of Desktops, Laptops and Ultra-Portable Laptops – T021/16 Issued on: 9 February 2016 / Closing on: 23 March 2016 A Clarication Meeting is scheduled for Wednesday 24 February 2016 at 1000 hours (CET) and will be held at Malta Information Technology Agency (MITA), Gattard House, National Road, Blata l-Bajda. Economic operators interested in participating in these call for tenders are to note that workshops are organised by the Department of Contracts at the premises of Centre for Development Research and Training (CDRT), San Salvatore Bastion, Sa Maison Road, Floriana FRN 1610. During these workshops, economic operators will have the opportunity to familiarise themselves with compiling and submitting a tender online. More information is available in the tender document. ing what they know how to do best: make friends happy at taxpayers' expense. Only in 2015, the public was also regaled with a few other choice ex- amples: Joe Cassar's resignation as MP after being revealed not to have declared house works financed by Joe Gaffarena when he was a PN minister; and Giovanna Debono's 'departure' from the PN bench after her husband was charged with us- ing ministerial budgets to finance private constituents' public works. So how, after promises of ditching political back-scratching, are we still here? Public policy expert Godfrey Pirotta's pithy explanation in Public Life In Malta from 2012, still rings true: "Our politicians, and many of their hangers-on and officials, see themselves and are seen by their electorates and the public in general to be above the law. No matter the seriousness of the scandal they are certain the 'Go to Jail' card in their game of political monopoly was never inserted in the pack." mvella@mediatoday.com.mt Does Malta aid foreign corruption? Most corrupt Source: Transparency International Iraq 16 pts Libya 16 Angola 15 South Sudan 15 Sudan 12 Afghanistan 11 North Korea 8 Somalia 8 tor where Azerbaijan is a strate- gic energy partner for the EU. On 9 December the EU even said that it is "ready to further deepen and broaden our rela- tion with Azerbaijan". Having economic projects and high trade levels with Azerbaijan does not stop the EU from mounting pressure on the coun- try to address its human rights situation and this should apply to any other EU country, includ- ing Malta. Images of perceived corruption: (left) Café Premier and below left, the beneficiary of the Old Mint Street expropriation, Marco Gaffarena. And on the foreign end, African billionaire Isabel dos Santos and Azerbaijani ruler Ilham Aliyev, whose country's SOCAR will supply gas to Malta A load of gas: Joseph Muscat (right) discusses energy issues with Socar president Rovnag Abdullayev (second from left)