As published on timesofmalta.com, Sunday 25 July, 2021.
Malta has requested access to a new cache of data on offshore holdings in Dubai in a bid to crack down on large-scale tax evasion and financial crime.
The request, for data on any Maltese passport holders, was sent to the German government by Maltese tax officials this week after Berlin last month purchased data on millions of international taxpayers from an anonymous source in Dubai.
Two high-level Maltese government sources told Times of Malta that the move was aimed at uncovering potential Maltese tax dodgers who hide their wealth overseas, with a particular focus on high-net-worth individuals.
Maltese authorities have received intelligence of potentially irregular holdings by Maltese nationals in the Gulf emirate in recent years.
Tax evasion, and lax enforcement thereof, was singled out as one of the main reasons why Malta was last month placed on the so-called grey list of untrustworthy financial jurisdictions.
Global watchdog, the Financial Action Task Force ‘greylisted’ Malta and the government has since signed a commitment to improve the effectiveness of its fight against major financial crime.
Dubai has been at the centre of the political crisis in Malta that led to the collapse of the Joseph Muscat labour administration in 2019.
It was uncovered how former minister Konrad Mizzi and former chief of staff Keith Schembri had both tried to open bank accounts for their Panama companies exposed in the Panama Papers leak.
Yorgen Fenech, who stands accused of complicity in the murder of journalist Daphne Caruana Galizia, also held a Dubai account for his offshore company 17 Black, which is the subject of an ongoing investigation into suspected corruption and money laundering.
The matter was raised in parliament earlier this month when Nationalist MP Jason Azzopardi filed a parliamentary question to Prime Minister Robert Abela asking whether Malta would try and get its hands on the data.
Given parliament’s summer recess, Abela has until October to submit a reply.
A spokesman for Finance Minister Clyde Caruana said the government does not approve such requests since the tax authorities’ operations are independent.
“In fact, he is not even informed about such requests if and when they are taken,” the spokesman said.
In June, Germany purchased data from an anonymous source in Dubai on millions of international taxpayers.
The data provides information on people who own land, property and other assets in the Gulf, including several thousand Germans, the German finance ministry said in a statement announcing the move last month.
The aim of the purchase of the so-called ‘Dubai list’ was to identify tax offences such as undeclared income, assets that have been hidden from the authorities and illegal cross-border transactions, it said.
The German Federal Central Tax Office (BZSt) paid around €2 million for the data, according to Der Spiegel magazine.
“With this new data, we are illuminating the dark corners in which tax offenders have been hiding until now,” said Finance Minister Olaf Scholz.
“Now it is the turn of the tax investigators to track down the offenders and bring them to justice. In this way, we will ensure that everyone makes their fair contribution,” he said.
The data has already been handed over to Germany’s federal states for examination so they can decide whether to initiate criminal proceedings.
Several German states have over the past decade bought CDs or USB memory sticks allegedly containing data on German taxpayers who had parked their fortunes in Swiss banks.
Fearing prosecution, many of Germany’s rich and famous subsequently came forward to declare their hidden wealth, boosting the tax coffers of Europe’s biggest economy by billions of euros.
But Switzerland reacted angrily, saying the data was stolen in violation of its banking secrecy laws.