US DTA to be Ratified by December

MEDIA ROOM

The double-taxation treaty between Malta and the United States is expected to be ratified by the US Senate in the next three months.

Speaking during an extensive interview with sister newspaper Business Today, which is freely distributed with the Wednesday edition of MaltaToday, Douglas Kmiec, who was recently appointed as the American ambassador for Malta, told Business Today:

“Now that agreement is finished in terms of its substance, but it needs to be ratified by the Senate of the United States. One of the things that could be improved upon actually is the ball in our court, namely finish this transaction.

“It’s not really Malta that has really been holding up; it’s two other countries that were negotiating the same agreement with Malta,” Kmiec explained, “The Senate of the United States likes to multi-task, and they waiting for these agreements to be considered together,” he added.

Malta-US double-taxation agreement

Ambassador Kmiec explained how the Malta-US double-taxation agreement was currently being discussed in the Senate Foreign Relations Committee.

“My relationship with the members of that committee is quite good; actually it’s bilateral in terms of bipartisanship, because both Senator Kerry and Senator Lugor have been very encouraging of our work here,” the new US Ambassador said.

“Senator Lugor is a long-time personal friend, so I’ve been calling the staff of the Committee and the assurance that I get is that it’s ready – it’s just a question of timetable, probably this fall, what has been described to me,” he added.

The current double-taxation treaty between Malta and the US was signed on 27 March 2008, 13 years after a previous agreement was stopped by the US after the release of Egyptair hijacker Omar Ali Rezaq in 1993 by Malta, seven years into at twenty-five jail term in which 61 passenger were killed.

Tonio Fenech, Minister of Finance, Economy and Investment, had signed the Double-Taxation Treaty on behalf of the Maltese Government last Thursday, in the presence of then US Ambassador Molly Bordonaro.

Michael Mundaca, who headed the US Treasury delegation in Malta, signed the document on behalf of the United States.

Fenech had told sister paper Business Today at the time that this had been the latest milestone reached in a process commenced with a meeting between Prime Minister Lawrence Gonzi and former President George Bush in 2005.

“It ends formal negotiations and prepares the treaty text agreed between the two countries for ratification through a United States Senate for Foreign Relations review and the Maltese Parliament,” he added. Fenech said that the technical negotiations between the US Treasury representatives, which started two months before, were tough and got stuck at times.

“However President Bush’s political will to push this Treaty through led to the interventions necessary to strike a deal between the two countries,” Fenech had told Business Today.

Commenting on the agreement, the Finance Minister said the Double-Taxation Treaty “makes a welcome addition to Malta’s existing network of over 46 treaties and is significant because of the strengthening relationship and signals this provides to the business community in both the USA and Malta.”

Asked by Business Today a year and a half ago whether the US had put joining the Partnership for Peace as a pre-condition for Malta before the US consented to this agreement, Fenech had said: “Absolutely not.”

He added that in the past four years, Malta had already signed a Ship-boarding agreement with the US, “a clear sign of the excellent relationship that Malta and the US have developed over the past few years”. This was reported by Maltatoday.