The European Commission may be probing one of Malta's maritime state aid schemes because of possible "unofficial resentment", sources close to the local and international maritime industry have said.

Last week, the EU executive began examining whether the island's tonnage tax scheme is overly favourable to non-passenger or freight vessels, thereby breaching EU state aid rules.

Yachts, fishing boats and oil rigs are allegedly falling under Malta's tonnage tax category despite not being used to transport people or goods.

Transport Malta has not officially reacted to the announcement, as it is still expecting more information from Brussels.

But industry sources do not expect it to adversely affect shipping, even though bad publicity is unwelcome in this highly competitive sector.

Lino Vassallo, a former executive director at the Malta Maritime Authority, said there is no cause for concern but the industry must take the investigation seriously.

"The fact that Malta has now become the biggest shipping register in the EU might be irking some of our competitors," said Mr Vassallo, who is also the general secretary of the Malta International Shipping Council.

"However, the Commission's investigation has to be taken seriously and if there is any tweaking in the drafting of the law which needs to be done, we must do it."

Anne Fenech, a seasoned lawyer in maritime affairs, agreed.

"I was quite surprised with the announcement as Malta's register has very updated and modern laws and the tonnage tax scheme is only one of Malta's many selling points," she said.

"Our advantages rest elsewhere including our time zone, geographical position in the middle of one of the most busy sea routes in the world and a 24/7 excellent service provided by our maritime directorate at Transport Malta."

Mr Vassallo said almost all of Malta's current register consists of passenger or cargo ships, which already qualify for the scheme.

This means the investigation only concerned yachts, oil rigs, fishing vessels and similar vessels considered insignificant for Malta's register.

It allows all interested parties, including Malta's direct competitors, to send views on the alleged infringement of state aid rules.

Malta can respond before the Commission's decision, which could be to amend the scheme.

Source: The Sunday Times