The true history of financial services

I have known John Consiglio since I attended primary school in Qormi. Over the years, as I developed, legislated and regulated the financial services in Malta, he assisted in specific areas within the financial services structures.

In his article of April 9 (‘Get politics out of financial services’), printed on the back page of this paper, he mentions post-1960 offshore operations. I am unclear about the post-1960 period he is referencing.

The Malta Financial Services Authority. Photo: Mark Zammit Cordina

In 1987, then minister Joe Fenech engaged an American bank to legislate an offshore regime, which cost four million Maltese liri. 

The result was one piece of legislation establishing MIBA, exempting any company registering under MIBA from any tax or regulatory obligation under any other law. Many countries reacted by announcing the cancellation of our double tax agreement with them.

As minister of finance, I engaged in various discussions with different countries to persuade them to postpone their decisions regarding double tax agreements and to address the issues causing problems. I proposed the concept of a robust financial services structure that would be onshore, not offshore.

One Sunday afternoon, Lino Spiteri and I exited the studios of Radio 101 after a political discussion. 

I shared my thoughts with him, who agreed with the initiative’s trust and promised to speak with Alfred Sant and his colleagues.

I appointed KPMG UK as consultants. I had extensive discussions with them, with then attorney general Tony Borg Barthet, Mario Felice and Joe Bannister to develop various legislative instruments. Once the draft laws were prepared, I invited all MPs in parliament to explain these drafts. Some attended.

These laws were debated in parliament for months in 1994, with the sole participation of Karmenu Mifsud Bonnici and me. After the first four challenging sessions, when Mifsud Bonnici wanted to ensure no hidden agendas, every single article of these laws was thoroughly reviewed by both of us. His contribution greatly enhanced the legal package.

The outcome was a robust package with bipartisan support that withstood the test of time. The threat of cancelling the double tax agreements ceased and many new agreements were negotiated.

Today, it is recognised that the financial services sector is Malta’s primary economic activity.

This is the second time I have felt compelled to correct this misleading narrative of Malta’s economic history. I hope this is not another attempt to undermine my contribution to the economic development of Malta and to erase my name from its history.

I encourage Times of Malta to fact-check such contributions before publishing them.

John Dalli – Siġġiewi