Malta has been put on notice by the European Commission that it is failing to help other member states recoup taxes owed to them and held in Malta.

The European Commission has opened an infringement procedure against Malta by sending it a letter of formal notice about the issue.

Under Maltese law, a foreign country filing a recovery claim in Malta must obtain clearance from the courts before that claim can be executed.

The European Commission says that is a violation of Directive 2010/24, which sets the rules for member states to assist each other in recovery claims. It says the directive makes it clear that enforcement instruments issued by member states do not require further recognition at a national level.

“Furthermore, Malta failed to apply the recovery Directive correctly and to provide assistance,” the Commission said as it announced the infringement procedure on Friday.

Malta now has two months to reply to the Commission position in writing. If the Commission believes that response to be unsatisfactory, it may decide to issue a reasoned opinion – the negotiating step before the Commission is empowered to refer the issue to the European Court of Justice.