The Malta Independent 16 December 2018, Sunday

Malta singled out in Transparency International ‘Golden Visa’ report

Wednesday, 10 October 2018, 11:45 Last update: about 3 months ago

For the IIP to contribute in a sustainable manner, Transparency International (TI) and Global Witness (GW) said in a report that Malta "needs to increase transparency and accountability in the management of contributions and decision-making, particularly by limiting the discretion of public officials".

"Otherwise, the program is at risk of benefiting the few to the detriment of many," the report, called "European Getaway – Inside the Murky World of Golden Visas", says.

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In an 86-page long report published online, the two anti-corruption organizations described the mismanaging of this practice to be on par with opening the doors of Europe to criminals and the corrupt, thanks to lax, opaque, and mismanaged ‘Golden Visa’ schemes. The report also comes just weeks after a real-estate agency, reportedly controlled by a Russian businessperson who reportedly purchased Maltese citizenship, was raided by police in Finland due to being suspected of being at the center of a €10 million money-laundering operation.

Senior Campaigner at Global Witness Naomi Hirst explained that given these inherent risks, these schemes must have the "highest standards of du diligence checks", so that countries know who they are welcoming in and where their money came from.

‘Unfortunately, that is not what we are seeing. This approach exposes countries to corrupt individuals, and risks the corruption of the state itself as profit-hungry governments disregard the dangers and enter into a race to the bottom.’

TI went so far as to title their own press release about the report as "EU member states in race to the bottom to sell Golden Visas to the super-rich".

Parliamentary Secretary for Reforms, Citizenship and Simplification of Administrative Processes Julia Farrugia Portelli tweeted about the report, saying that ‘whilst agreeing with TI’s call for more standardization & information sharing on rejected RCBI (Resident/Citizen by Investment) applicants, Malta notes that it is already implementing most of the recommendations included in the report’.

Portuguese MEP Ana Gomez also commented on the report, insisting that ‘Golden Visas foster corruption and money laundering, abet organized crime, undermine Schengen, and put national and European security at risk’.

State Reaction

In a press release, the government, through the Malta Individual Investor Programme Agency (MIIPA), stated that there are elements of the report with which they agree and support, and others which ‘do not seem to be accurate of adequately researched’.

MIIPA agreed with the recommendation that there should be ‘standards of enhance due diligence across the board’, the ‘broadening of anti-money laundering requirements including on approved agents’, and the establishing of mechanisms for the ‘coordination of information sharing between member state concerning rejected applicants’.

On the other hand, they pointed out that not only are most of the recommendations are already in place for the Malta programme, but that the suggestions ‘seem to have been taken from the IIP and recommendations that Malta has been making in dedicated fora’. Also bringing up that Malta has the highest rejection rate of all programmes, at round 25% compared to only 10% of other jurisdictions.

Going into how the funds are used, they state that 70% of the revenue is payable to the National Development and Social Fund (NDSF). An agency set up to ‘undertake initiatives for the benefit of current and future generations’.

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