Free zones to be in Customs’ hands - not Freeport Corporation

Free zones to be in Customs’ hands - not Freeport Corporation

Customs wants free zone near airport - and is willing to move its HQ there

The Customs Department is offering to move out of its historic premises in Valletta to new offices near the former Air Malta headquarters, with director general Joseph Chetcuti saying the site would be the logical one for another free zone.

Joseph ChetcutiJoseph Chetcuti

There is currently only one free zone in Malta – at Malta Freeport – which is regulated by the Free Zones Act, and falls under the remit of the Economy Ministry.

Mr Chetcuti said it had been confirmed that his department would oversee them. In August 2016, Aaron Farrugia, then the CEO of the Freeport Corporation had said that it was the logical authority which should take over free zones, which set off a huge backlash with wrangles go on behind the scenes for some time.

Read: No use crying over spilled milk

“I was concerned,” Mr Chetcuti admitted, “but not any longer. Malta Enterprise and the Economy Ministry, when they were talking about the logistics hub, were originally envisaging passing the control to another authority. We resisted that and the final outcome respects the common good,” he said.

“Free zones should be either near a sea port or the airport – as then they can be securely enclosed and controlled 24/7 by Customs, which would man every gate round the clock. The operator would have to keep detailed records. It is not too different to the bonded warehouse concept – where taxes are suspended unless they are moved into the community.

“But the goods in a bonded warehouse are covered by a bank guarantee – whereas there is no fiscal cover in a free zone. Hence, Customs are responsible for the revenue – and this is not just Maltese revenue but European Commission revenue, which gets 80 per cent of it. This is why we are subject to audits,” he stressed.

Mr Chetcuti, who took over the department three years ago after three decades at the department, has had his hands full with preparations for Brexit but has also been thinking outside the box. One of his ideas is for a free zone at the former Air Malta headquarters.

Free zones should be either near a sea port or the airport

“It is linked to the sea port and it could attract new investment. Why not have a fine arts warehouse in a free zone, as some airports do? And you can have a tunnel linking the Freeport, the airport and the logistics hub planned for Ħal Far.”

He explained that there was already a Customs presence at the Freeport and Ħal Far, but if the department had its headquarters at the edge of the Luqa zone, it would easily be able to offer 24/7 coverage there too.

“Customs House is one of the very few non-sacred buildings built by the Knights, which is still used for its original purpose.

“I am sure that a better use could be found for it,” he said.

“When it was built, Grand Harbour was the main port. Today, all you need here is a small office to handle passenger traffic. And industry is no longer centred around Grand Harbour. Being in Luqa would be much more convenient for industry.”

And what about other sites?

He said that he would have no objection to the Mediterranean Maritime Hub becoming a free zone, once the site – which is also connected to a port – was segregated and secured. The oil, gas and yachting hub currently has a public road going through it to ease traffic while the Addolorata junction is redone.

“Once that road is closed, we will grant it. Everything is in place.”

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