A court has ordered a company owned by Malta’s Ambassador to Montenegro, Karl Izzo, to pay €120,000 in contested VAT and import duties.

Malta’s Ambassador to Montenegro Karl Izzo

Mr Izzo, a personal friend of Prime Minister Joseph Muscat, is the co-owner of the retail fashion business Dizz Group, together with his wife Diane.

Read: Karl Izzo approved as non-resident ambassador to Montenegro

Madam Justice Lorraine Schembri Orland ordered the payment of the contested tax arrears on imports dating back to 2003 and 2004.

The company was found to have brought over a number of fashion items under certification that exempted it from paying duties on items imported from Europe. An inspection by Customs officers found that the origins of some of the imported clothing items could not be verified because they did not have labelling indicating they came from Italy.

When the findings were referred to the Italian authorities, confirmation was received that, although the certification was authentic, it was not possible to verify whether all the products in the consignment had originated from Europe and were, therefore, covered by the exemption certificate.

Mr Izzo insisted in court the Italian company Dizz Limited, from whom they imported the fashion items, had always told them the clothes were made in Italy and would be labelled as such.

It was not possible to verify whether all the products had originated from Europe

He said he would not be present on site when the consignments arrived because the shipments were handled by his freight forwarders.

He said that he could not recall signing a document with the Customs department agreeing to pay the import duties due. An ensuing dispute led the company to take Customs to court in 2006 over the contested payment.

The court this week threw out Dizz Limited’s claim that the €120,000 tax charge was incorrectly applied by Customs.

The company was ordered to settle the import duty and VAT on the clothing items imported in 2003 and 2004.

Mr Izzo’s appointment as a non-resident ambassador was approved by Parliament in January following a heated sitting of the Public Appointments Committee. Opposition MPs had highlighted his lack of qualifications and experience in the diplomatic arena.

Asked to justify his suitability for the role, Mr Izzo referred to his many trips to Montenegro relating to his work in sports.