EU sues Malta over ‘golden passports’

EU sues Malta over ‘golden passports’

On Thursday (29 September) the European Commission formally challenged Malta in the EU’s highest court over its system of granting passports and Maltese citizenship to wealthy third-country nationals in exchange for money and investment.

The commission said it viewed the scheme as a breach of EU law and has long urged Malta, which has been an EU member since 2003, to dismantle it over fears of money laundering and granting citizenship to high-risk individuals.

«By offering citizenship in exchange for predetermined payments or investments to people who have no real connection to the Member State concerned, Malta is in breach of EU lawtweeted Didier Reynders, EU Commissioner for Justice.

«The assets of the European Union are not for sale“, he added.

The Maltese government responded with a statement denying that the system violated EU law and reiterating that its policy of granting citizenship was a purely national matter.

The legal process”gives Malta the opportunity to further refute these claims and let the Court of Justice of the European Union (CJEU) rule on the matter‘ said the government.

If Malta loses its case before the ECJ, it will have to abide by the court’s decision and could face heavy fines.

system history

This controversial scheme was announced shortly after disgraced former Prime Minister Joseph Muscat took power. This was a concession granted to Henley & Partners, a company that operates similar systems worldwide.

This system has enabled hundreds of mainly Russian, Chinese and Saudi applicants and their families to acquire Maltese nationality, travel visa-free and obtain the right of residence across the EU and, until recently, the UK.

Individuals applying for a passport had to meet several conditions, including renting or buying real estate of a certain value and for a certain duration, proving a connection to the country, paying thousands of euros in fees, and donating Hundreds of thousands of dollars to the Maltese government. They also had to go through due diligence processes to ensure their good reputation and character.

However, numerous studies have uncovered glaring problems.

It turned out that many applicants had only rented a cabin or garage to meet the requirements, but did not live in the country. Others had no connection to Malta and did not want to settle there, but openly wanted to use it as a stepping stone to other EU countries.

At the same time, the government has not been transparent about who gets citizenship through this system in order to mislead journalists.

However, years of investigation revealed that Maltese citizenship was granted to members of the Saudi royal family, Russian oligarchs suspected or guilty of money laundering and tax evasion, as well as others close to Vladimir Putin’s regime, Turkish tycoons and several others who did so , were later investigated for various financial crimes.

Daphne Caruana Galizia, murdered in 2017, was one of the journalists who denounced this system. His reporting earned him numerous threats and legal action from the government and the concessions company.

The island’s regime had also attracted the attention of Low Taek Jho, an international fugitive accused of stealing billions in the biggest corruption scandal in Malaysian history, though his request was ultimately denied.

Others applied for Maltese citizenship even though it was illegal in their home country, and reports of bribes paid to politicians involved in launching the project were legion.

Since 2013, Malta has raised €1.1 billion thanks to this controversial practice of granting citizenship in return for investment.

Previously, the island of Cyprus and Bulgaria had similar programs, but these were phased out due to national scandals and pressure from the EU.

Nicosia has increased its offer of “Golden passportlast year, while Bulgaria pulled out over concerns about possible irregularities in nearly half of the passports issued.

After Russia invaded Ukraine, Malta excluded Russians and Belarusians from its system, while Europe cracked down on Russian oligarchs and political activists.

In March, the Commission issued a recommendation that EU Member States “that still have investor citizenship regimes in place must end them immediately».

She also called for the immediate removal of the “golden passportsor similar investment-related residence permits for Russians and Belarusians affected by EU sanctions.

Reference: www.euractiv.fr

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