Assurances to ensure Malta-based companies with Libyan state investment will continue to operate in light of new EU sanctions were obtained from Brussels following tough negotiations.
The 27 member states yesterday agreed to include a number of Libyan state entities in its sanctions list, freezing their assets in Europe.
The list, to be published on Friday, includes a number of investment arms of the Muammar Gaddafi regime, including the Libyan Investment Authority, the Libyan Arab Foreign Investment Company Ltd (Lafico), which has many interests in Malta, and the Libyan Central Bank.
Malta objected to blanket-wide sanctions on the assets of the North African country fearing a negative impact on Maltese companies having Libyan investment. However, following assurances given by other member states, Malta’s reservations were resolved and the EU could agree on new sanctions.
Malta’s Permanent Representative to the EU, Richard Cachia Caruana, said the government had managed to get reassurances enabling Maltese businesses, employing hundreds of Maltese workers, to continue to operate.
“There had been a long discussion on which entities should be added and which ones should not. Malta’s stand, while in favour of sanctions, was cautious on some elements since these would have either impacted negatively on the Libyan people or on employees of companies in Malta and other member states,” Mr Cachia Caruana said.
“Once assurances were received in this regard, Malta lifted its reservations. Malta has no problems with defending the national interest as required. It also appreciates the support it received from all other member states on this matter,” he said.
Lafico – one of the investment arms of the Libyan regime included in the list of EU sanctions – has a number of business interests in Malta. It currently holds shares in many Maltese companies, including the Corinthia Group (which, apart from Malta, has investments in many major EU cities), the Vivaldi Hotel, Milano Due, aviation company Medavia and manufacturing companies such as Medelec. Lafico also has an administration office in Sliema.
According to EU sources, while the sanctions will restrict money and dividends being paid to the Libyan regime through these investments, the companies involved will still be able to continue with their normal business operations.
The sources explained that when the new sanctions kicked in, companies with Libyan state investment in the EU would be expected to act like the UK’s Pearson group, the publisher of The Financial Times and The Economist, which froze the 3.2 per cent share capital owned by the Libyan Investment Authority.
The sources said Malta was not the only EU member state which had reservations. Other countries with much larger Libyan investment, particularly those involved in the oil business, had also managed to ward off attempts to freeze the company’s assets through sanctions.
Although it is not yet known how many European companies will be impacted through the sanctions, it is estimated that LIA and Lafico have vast assets in Europe and hold major shareholding in a number of top companies, including Italian bank UniCredit, Fiat, ENI and Italian football club Juventus. Other countries, including France and the UK, also have major Libyan state investments, particularly in real estate and the oil industry.
Last week, Brussels had already imposed the toughest international sanctions on Col Gaddafi’s regime, ordering asset freezes and visa bans against the Libyan leader and 25 others for its reaction to the uprising in the North African country.