Leaked documents expose loopholes in Malta cash-for-passports scheme
Michelleraponi / Pixabay
Leaked documents expose loopholes in Malta cash-for-passports scheme

Leaked documents Wednesday exposed Malta’s cash-for-money scheme, which provided loopholes for Chinese, Saudi and Russian millionaires to attain EU passports. The documents were exposed by the Daphne Caruana Galizia Foundation following material obtained from a whistleblower as part of an investigation that began in 2013. In this scandal, foreign nationals were given passports following lucrative investments worth millions of euros and a requisite three-week stay in the country.

According to the Foundation’s investigation, while Malta’s Parliament was in recess, Prime Minister Joseph Muscat introduced a scheme for individuals to buy Maltese passports behind the scenes. He did so by establishing a new state agency known as Identity Malta, which incorporated all departments responsible for passports, identity cards, and work and residence permits. He subsequently signed an agreement with Henley and Partners to take over a passport sales program. This endeavor has been reported to have made over EUR 1 billion in the first 18 months of operation alone.

According to the EU Commission, so-called “golden passports” undermine the essence of EU citizenship, and the commission has stressed that member states should only provide passports to individuals with genuine connections to the country.

Following the Foundation sending Henley & Partners a list of 40 questions, they received a number of detailed classified responses and a single statement for publication. According to the corporation, they had simply assisted Malta in “a remarkably successful sovereign and economic innovation platform, raising hundreds of millions of Euros … without which healthcare, social and cultural investments would not have been possible.” They further claimed that allegations of a “systemic problem” are “fundamentally false and potentially defamatory”.

Demand for passports was especially high from Russian buyers following EU imposed sanctions on the state in 2014 with regard to the Crimean Referendum and Russia’s military intervention in Ukraine, whilst demand was also identified from individuals affected by former US president Donald Trump’s “Muslim ban.” There has also been recent spike in UK citizens buying passports following the 2016 Brexit referendum.

Cyprus, which is alleged to be running a similar scheme, is facing infringement proceedings, too.