I refer to the news story ‘History’ To Blame For Delay In Malta-US Double Taxation Deal (November 24), where it is said that “the last similar agreement (on double taxation) between the two countries, brokered in 1980, had been terminated in 1997”.

This might have given the impression that the agreement came to an end during the watch of the 1996-1998 Labour Administration. Not so; the double taxation agreement was denounced by the US in 1995, which by the treaty’s own terms, meant it would cease to be operative two years later. The US Treasury especially was at the time very critical about the effects of Maltese legislation meant to promote financial services in Malta.

According to a confidential briefing I was given in 1997, there had been a visit to the US prior to the 1996 election by then Finance Minister John Dalli and by Joe Bannister, then also head of the financial services set-up in Malta. They had met, among others, representatives of the US Treasury but only managed to harden the latter’s negative views about the taxation system prevailing in Malta regarding financial services.

I (the author was Prime Minister at the time) was advised that, on this matter, it was consequently going to be a very long haul to recapture the attention and interest of the Treasury, who were the leading players, not the state, on international taxation issues.

The Labour government immediately started to address the problems raised by the US, a number of which were quite legitimate.