The Malta Independent 6 December 2023, Wednesday
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Muscat says there was no need to present SOCAR agreement to the European Commission

Tuesday, 26 September 2023, 19:27 Last update: about 3 months ago

Former Prime Minister Joseph Muscat has said that there was no need to present the security of supply agreement with Azeri state-owned company SOCAR to the European Commission, during a meeting of the Public Accounts Committee.

During today's Public Accounts Committee sitting, Joseph Muscat was asked about the Daphne Foundation statement which read that Muscat had misled the committee in a prior sitting.

Muscat said that he intended to speak about this regardless of the aforementioned statement by the foundation, as he had checked after he gave the answer in the last sitting.


He said he had made a mistake when he said that the Commission had visibility of the agreement between SOCAR and the government - which was a security of supply agreement.

He said that the government had sent everything needed and also what had been requested by the European Commission, and checked why the commission didn't have visibility of the SOCAR agreement with government.

He said he found that "this was an agreement between the government and an Azerbaijan state company that was not part of the Electrogas tender, had no direct or indirect impact on Electrogas, and Electrogas was not part of it."

This agreement was practically an insurance policy that the government took, which said that if in some way Electrogas pulled out, SOCAR would not then say that they would no longer continue providing gas to Malta because of that, Muscat said, but rather that the Maltese government would have the right to start buying the gas itself. "That is what this agreement was."

He said the agreement never came into practice as Electrogas continued moving forward.

He said that the government had taken advice from the firm Clifford Chance, which he described as "one of the go to international firms." He said the firm had given the government written advice, which he no longer has access to, which said that this agreement didn't need to be presented to the Commission. The reasons given were "as the standard for state aid notifications reads that if the government ties itself to mandatorily do something then it needs to notify, but the government in this agreement just had the option of the going into it or not." He said that for it to be considered state aid there needs to be a commitment by the state, "which there wasn't as there was simply an option, and that this commitment must be firm and concrete, and this wasn't the case."

He said the agreement was a bilateral one between the government and SOCAR, adding that Electrogas wasn't part of it, nor was it a witness to it. Clifford Chance, he said, had concluded that this agreement had no risk of state aid and that this agreement was not part of the project, but a standalone the government took as an insurance policy, concluding that this is why notification was not needed and that this is why it wasn't part of the documents presented to the EU Commission.  

He also said that after the agreement had become public, the Commission had also not asked for it. He said the agreement is today terminated as it wasn't needed and no payments were made as it wasn't used.

Muscat, during the sitting, was also asked about by the PAC Chairman, Darren Carabott, about a statement by the US State Department back in 2021 which read that Keith Schembri and Konrad Mizzi had been banned from travelling to the United States over their "involvement in significant corruption."

"Today, the U.S. Department of State announces the public designation of former Maltese public officials Konrad Mizzi and Keith Schembri due to their involvement in significant corruption. In their official capacities as Minister of Energy and Conservation of Water and Chief of Staff to the Prime Minister, Mizzi and Schembri were involved in corrupt acts that included using their political influence and official power for their personal benefit. Specifically, there is credible information that Mizzi and Schembri were involved in a corrupt scheme that entailed the award of a government contract for the construction of a power plant and related services in exchange for kickbacks and bribes. Their actions undermined rule of law and the Maltese public's faith in their government's democratic institutions and public processes," the statement by US Department of State had said. It was read out during the PAC sitting.


Muscat said: "A sign I think that the American government knows something that I don't, that the Auditor General doesn't know, and the public inquiry doesn't even know. What they know or don't know I am not the one you need to ask."

Asked if some form of communication ever took place for him to check whether there was something or not in this regard, Muscat said that the US Department of State statement was in 2021 (when he was no longer Prime Minister). He also said "You think if I were to ask the US government a question on third parties they would answer me?"

Asked if there was some form of contact with him by the Maltese government to clarify this point, he said: "I'm not the Prime Minister." Pressed on this latter question, Muscat responded with a question: "Why would it make contact with me regarding this statement. Is it mentioning me?"

Carabott responded: "Its mentioning your former Chief of Staff and former minister responsible for energy." Muscat said: "If the US government wanted to say something against me you would find me on that list. I'm not on that list."

Asked again if the Maltese government contacted him to clarify this situation, he said: "On what is the Maltese government to make contact with me? If anything the Maltese government would make contact with the American government, as I imagine happened. If there was an allegation against me, then maybe I'd understand it, but there isn't."

He said that the US government said things which he, the NAO and the public inquiry do not know.

Asked if he ever received information condemning Schembri and Mizzi in this regard in terms of what the US government said, Muscat said: "who am I to receive information condemning from? (...) If you're asking me if the US government ever contacted me on this case, I say no. If you're asking if I ever contacted the US government on this case, I say no." Asked whether information ever reached him that condemns Keith Schembri and Konrad Mizzi and he did nothing, Muscat said no.



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