In what appears to be a stark departure from the terms agreed upon with the European Commission, a points system is in place to assess whether those seeking Maltese and EU citizenship through the Individual Investor Programme, providing them with numerous opportunities to reduce the time they actually have to spend in Malta in order to be considered “effective residents” of the country for 12 months as the programme required.

The adoption of this system to determine whether or not IIP applicants have met the residency requirements was revealed by the executive chairman of Identity Malta, Joe Vella Bonnici, as he appeared before Parliament’s Public Accounts Committee together with Jonathan Cardona, the CEO of the IIP, this week.

The programme had proven to be controversial in Malta and beyond, with the European Commission raising concerns about the fast-track EU citizenship being provided by Malta against a fee. Ultimately, the Commission’s concerns were allayed on the understanding that applicants would have to be effective residents for at least a year before obtaining citizenship.

It was immediately certain that effective residency did not imply spending 365 days in Malta, but when the Commission reached an agreement with the Maltese government on January 2014, this newspaper had confirmed with the former that effective residency was understood as being based on the international tax law model.

The Commission, therefore, appears to have expected IIP applicants to spend at least 183 days – six months and one day – in Malta during that 12-month period.

But there have been multiple indications that, in fact, applicants needed to spend much less time living in Malta to actually become Maltese citizens. Last March, in fact, Bloomberg reported that Mr Cardona himself had dismissed any notion that would-be Maltese citizens intended to make their new country their home.

“It doesn’t say physical residency… we expect an individual to be in Malta for a number of days; we don’t go into the specific number. If you’re asking me, are these people going to move here entirely, I would say, listen, let’s not fool ourselves,” Mr Cardona was quoted as saying.

Last Wednesday, Mr Vella Bonnici simply said that applicants had to come to Malta at least twice: to apply to become citizens and to take the oath of allegiance.

Presumably, therefore, they can spend the rest of the year anywhere they please, as long as they make sure to qualify for “effective residence” through other means.

A ‘quality link’

Mr Vella Bonnici said that the easiest way to handle the residency requirement was to insist on applicants spending the entire year living in Malta, but noted that this was effectively impossible to implement in reality.

“What is important is not the number of days spent in Malta, but the quality of the link to the country,” he said.

He explained that Identity Malta wanted to ensure that requirements were flexible whilst avoiding any inconsistencies, and that this was achieved through the points system.

As a result, applicants have to specify how much time they are spending in Malta, but are also required to highlight other ways in which they have established a “quality link” with Malta.

Mr Vella Bonnici confirmed that any charitable donations to Maltese causes are factored in. What this effectively means, of course, is that applicants can pay to ease their own residency requirements.

Alternatively, applicants’ families can help secure their place. Spouses living in Malta, as well as children studying in the country, would also boost applicants’ score.

No Iranians, Afghans or North Koreans

In reply to a question by PAC chairman Tonio Fenech, Mr Vella Bonnici confirmed that Identity Malta did discriminate between countries of origin, and that three countries – Afghanistan, Iran and North Korea – are presently blacklisted.

Other countries are on a so-called ‘grey list’: applications hailing from these countries are deemed to be more sensitive.

Henley and Partners recently revealed that around 700 people have applied for Maltese citizenship through the IIP, which is capped at 1,800 successful applications.

Mr Vella Bonnici confirmed that, in the process, there have been applications which have been turned down, citing apparent links to money-laundering and other criminal activity as the reason for the refusal.

Mr Cardona also noted that in some cases, a media campaign against applicants contributed to the refusal of their applications.

He observed that accepting applications from people implicated in a controversy presented a reputational risk – irrespective of whether the allegations were right or wrong.