U.S. Boycott of Libya Squeezes Malta

No matter how stubborn the stain, U.S. diplomats boycott what many people consider the best dry cleaners in town.

Buying a loaf of one of Malta’s best-selling breads potentially could land American visitors in jail or a $250,000 fine.

Paying for a stay at certain hotels on this tourist-destination island also puts Americans technically at risk for prosecution. So does eating at Malta University’s cafeteria for exchange students from the United States.

From a caterer’s kitchens to a fish market’s stalls to a waterfront lined with restaurants and nightclubs, Malta has myriad businesses on a U.S. government “blacklist” of companies that Washington contends are either owned or controlled by Libya.

For some years, Libya has maintained considerable investment on Malta, which is only 225 miles away out in the Mediterranean, and the island attracts Libyan tourists.

In addition, because of a U.N. ban on air travel to and from Libya, many Libyans take the ferry to Malta to catch flights to the rest of Europe.

Washington imposed a ban on Americans doing business with Libyan enterprises in 1986 as punishment for Libya’s alleged sponsorship of international terrorism.

But unless American tourists wander into the U.S. Embassy, on the third floor of an office building just outside Valletta’s bastion walls, and ask for a copy of the “blacklisted” businesses, they are unlikely to know which establishments are affected.

It’s clear the U.S. government’s main concern is keeping watch for possible sanctions violations by American companies.

“We work with the U.S. business community, exporters and importers, banking” and tour operator associations, Richard Newcomb, director of the U.S. Treasury Department’s Office of Foreign Assets Control, said in a telephone interview from Washington.

Credit card companies are also warned, so Malta’s hoteliers know some run the risk of unpaid bills if an American tourist pays with a credit card.

With American tourism just starting to grow on the island nation, the ban could get costly for Malta, whose largest revenue comes from vacationers.

“We very much wish to have the American business,” said Alfred Fabri, director of the Corinthia Group of Companies, which form the bulk of the Maltese businesses on Washington’s no-dealings list.

As sunlight poured past potted palms in the lobby of the five-star Corinthia San Gorg Hotel and guests breakfasted on a terrace overlooking three swimming pools cascading down to the sea, Corinthia’s top executive, Alfred Pisani, said Americans are encouraged to book elsewhere on the island and make up at most 2% of the hotel’s guests.

“We say in advance, ‘It’s going to be embarrassing for you,’ ” Pisani said.

Pisani’s company started as a family-run Maltese restaurant in 1962. But thanks in large part to a $3.5-million Libyan investment in 1974, it has grown into a multinational concern with hotels in Turkey, Tunisia, Hungary and the Czech Republic.

In March, after Corinthia purchased the high-rise Forum in Prague, organizers of the Czech city’s spring classical music festival had to scramble to find other rooms for the Detroit Symphony Orchestra. A few days earlier, the U.S. Embassy in Prague warned Americans they would be breaking U.S. law if they lodged at the Forum.

A large American jeans manufacturer had to yank its business from Corinthia, whose laundries stonewashed the garments.

Pisani says Libya’s share of Corinthia holdings amounts to 48% and the government of Libyan leader Moammar Kadafi has no say in how the business is run.

A Treasury Department spokeswoman, Beth Weaver, said she was unaware of any indictment stemming from a sanctions violation involving Malta-based companies.

Last spring, a local newspaper noted American exchange students at Malta University might be violating U.S. sanctions by lunching at the campus cafeteria, which is supplied by Corinthia. But mealtime went on as usual.

“I suspect if the American Embassy found this worrisome, it would have done something,” said Leslie Agius, director of the international students’ program. “Nothing happened.”