Issue link: https://maltatoday.uberflip.com/i/960495
maltatoday SUNDAY 1 APRIL 2018 News 7 TIA RELJIC CONTINENTAL Wind Partners is a complex network of energy development companies almost exclusively made up of offshore firms – some of which are Mal- tese – with no employees, the Malta Files documents have re- vealed. The revelation also implicates the Prime Minister of Serbia Ana Brnabic in the network which appears to have been set up to facilitate tax avoidance and hide ownership. Brnabic was the director of daughter company Continental Wind Serbia before she entered state administration. The company had a part in the incorporation of another Serbian subsidiary of the parent company from Malta, which received a €200,000 interest-free loan, doc- uments from the Malta Files pro- ject by the European Investiga- tive Collaborations (EIC) show. This, in itself, violates Serbian law on the minimum interest rates between affiliate compa- nies. The parent company, Conti- nental Wind, appears to be a shell company in Delaware, USA – itself a tax haven. Although the company does not develop wind farms in Mal- ta, it nonetheless accumulated revenue from renewable energy projects on the island and other offshore jurisdictions. Brbanic's former boss and par- ent company partner Mark W Crandall – an American citizen living in Serbia – established a Maltese trust in order to obscure the true ownership of the com- panies, Croatian newspaper Na- cional reported. The complex corporate struc- ture of Continental Wind Part- ners is clearly optimised for tax avoidance and hidden owner- ship, with offshore jurisdictions in Monaco, Singapore, Cyprus, Luxembourg, and Malta. A Maltese company in the net- work, River Power Solutions, al- though without employees, gave a €198,000 interest-free loan to Serbia in 2015. This loan was partially repaid in 2016, amount- ing to €140,000. But the Serbian Ministry of Finance set the mini- mum interest rate for long-term loans between affiliate compa- nies to be 5.07% a year in the meantime. This means that the Serbian company was left with at least €10,000 in possible gains due to unpaid interest, but the loans from Malta to Belgrade appear to be €298,000 – meaning that the Serbian subsidiary of the Maltese company had additional gains, as reported by Nacional. The purpose of the loan was a failed project to build district heating in Serbia by extract- ing heat from the Sava river in Belgrade, according to Crandall back in 2015. Therefore, the Maltese com- pany – controlled by Crandall – served as the middleman for channeling money from Luxem- bourg and Monaco to Serbia. Crandall was also referred to as a politically exposed person (PEP) by the Organisation for Economic Co-Operation and Development (OECD) in 2014, when his wife's sister became a minister in the Serbian govern- ment. When questioned about Con- tinental Wind Partners, Brnabic said that she was not involved in creating the ownership struc- ture, and that she doesn't know anything about it. Curiously, she did not disclose her opinion on offshore companies set up to hide ownership and allow for tax avoidance. In a statement last week, Ser- bian President Aleksandar Vucic said that it "seems Brbanic is guilty" because "she was director of a firm which existed and oper- ated in accordance with Serbian law," while "shareholders had other firms which were dealing suspiciously." The network of offshore com- panies was surveyed in silence by Vucic. The Malta Files is a collection of documents published by the EIC network, made up of jour- nalists and media outlets, includ- ing Nacional and MaltaToday. The documents reveal the ways in which Malta works as a base for tax avoidance in Europe. tia.reljic@mediatoday.com.mt The Annual Percentage Rate of Charge (APRC) of a typical Business Loan of €10,000 taken under the Fusion proposition, repayable over 5 years at a fixed borrowing rate of 4.99% per annum, and subject to a processing fee of €40, will be 5.4%. The loan will be repayable in 59 equal monthly instalments of €189.00 and one final instalment of €189.80. The total amount paid after 5 years will be €11,380.80. The maximum amount you may borrow is subject to your financial status, and to further approval by your branch. Terms and conditions may apply. O‹er valid until 30 April 2018. Approved and issued by HSBC Bank Malta p.l.c. 116 Archbishop Street, Valletta VLT 1444 which is regulated by the Malta Financial Services Authority. Licensed to conduct investment services business by the Malta Financial Services Authority. Terms and conditions may apply. www.hsbc.com.mt/fusion (Ref No. 100763 – 3/18) Together we thrive Because when business and life move fast, you may need a discounted business loan to help you expand or keep your business running. This is HSBC Fusion. The combined service for your business and personal life. Find out more at hsbc.com.mt/fusion 5.4% APRC Fixed Rate Business Loan Maltese companies involved in energy network tax avoidance scheme Serbian Prime Minister Ana Brnabic