Prime Minister Joseph Muscat today refused to name the company auditing Minister Konrad Mizzi, despite the minister telling a lawyer in open court to address questions about the audit company to Dr Muscat.
Dr Muscat said the name of the company would be made public once the audit was published.
Asked if it was the company or the government that wanted to keep it a secret for now, Dr Muscat said that while it was work in progress he thought it was best that everything was announced at once.
Questioned if he was comfortable with Dr Mizzi’s declaration in court yesterday, Dr Muscat said he was not there and did not know what the minister said as he had not seen the transcripts.
The Prime Minister's comments come one day after Dr Mizzi answered some questions about his financial setup while testifying during a libel case.
New Zealand disclosure 'limited' - KPMG
Dr Mizzi's trust is held in New Zealand - a jurisdiction he argued was a respectable one which shared information with other tax authorities upon request.
But a report prepared by audit firm KPMG for the New Zealand government makes it clear that automatic sharing of information about foreign trusts, such as that held by Dr Mizzi, is "limited".
The KPMG report, drawn up earlier this year, pointed out that the disclosure system in place in New Zealand “is perceived as inadequate”.
It noted that foreign trusts had limited automatic disclosure obligations vis-a-vis the New Zealand tax authorities but Inland Revenue there was empowered to request information from the trust and exchange it with foreign authorities.
The report said the regime in New Zealand relied on a foreign revenue authority being aware of the foreign trust and asking for further information from Inland Revenue. “It is reliance on this which may allow the foreign trust regime to be misused,” the report stated.
“Although we have no specific evidence, we assume that the existence of a foreign trust would be difficult for a foreign revenue authority to identify”, the report continued.
Leaked e-mails from the Panama Papers show that both Dr Mizzi and the Prime Minister’s chief of staff, Keith Schembri, wanted to avoid alerting banks in Malta about their New Zealand trusts.
Those questions should be addressed to the Prime Minister
Dr Mizzi, who was testifying in a libel suit against Nationalist MP Beppe Fenech Adami, was asked whether he was fined by Inland Revenue in Malta for violating tax laws by failing to register his New Zealand trust locally. He replied he did not go into the issue of registering his trust locally with his financial advisers, Nexia BT.
Dr Mizzi said he was informed, “much later”, that the trust needed to be registered. He said the form required for the registration of the trust was not available online and only two such trusts had ever been registered.
The minister testified that New Zealand was regarded as a reputable jurisdiction that shared information with foreign tax authorities.
The KPMG report pointed out that New Zealand’s standing as a country of integrity could actually be abused when it came to the setting up of trusts.
“Criminals may seek to use foreign trusts within the ownership structure of overseas vehicles in an attempt to avoid raising red flags with overseas financial institutions or third parties.
“The perception may be that New Zealand ownership overall helps mitigate the risk for foreign financial institutions performing due diligence or monitoring transactions,” the report said.
The shares in Dr Mizzi’s Panama company were held by his New Zealand trust, which disguised his ownership of the company.
He refused to name the company auditing his offshore financial set up. “Those questions should be addressed to the Prime Minister. You can speak to the Prime Minister about it,” Dr Mizzi said when asked by Dr Fenech Adami’s lawyer, Joe Zammit Maempel, for more details about the audit company.
The Panama Papers were made available to the Times of Malta through a partnership with the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung.