None of the fact-finding missions which came over to Malta from both the European Commission, the European Parliament, and other institutions that have commented on Malta’s passport selling scheme – the Individual Investor Programme (IIP) – never met any members of the scheme’s regulatory office, the regulator for the IIP scheme Carmel De Gabriele wrote in his office’s annual report.
Expressing his “utter dismay”, De Gabriele wrote in his foreword that none of the fact-finding missions which came to Malta “even bothered to request a meeting” with him or with any members of his office. Furthermore, he said, these same missions didn’t even “seem to have at least carefully studied any of this Office’s past Annual Reports before expressing in one way or another their deep concerns over this Programme.”
The European Commission, through its Justice Commissioner Vera Jourova, had demanded that Malta stipulate that people applying for the purchase of citizenship would have resided on the islands for at least a year; “The European Commission must ensure that Malta only gives citizenship to people with a real link to the country and who reside in it for at least a year”, she said last June.
The Organisation for Economic and Social Development (OECD) meanwhile last October named and shamed 22 countries, including Malta, that have either residency or citizenship programmes, for having lax rules that potentially pose high-risk to the integrity of Common Reporting Standard. This criticism was however brushed off by the Finance Ministry who said that Malta’s listing in the report was as a result of a “misunderstanding”.
The European Parliament last November published a draft report calling for the “phasing out” of citizenship by investment schemes across the EU. The vote to possibly implement this 208-article report is expected to take place in February 2019.
Degabriele’s report also contained various other suggestions, such as that the identity of people receiving citizenship through the IIP scheme should be kept secret save for members of parliament who’d be able to view the list as long as they bind themselves to an oath of secrecy. The recommendation came following pressure from citizenship-selling agents themselves. Currently those receiving citizenship through the scheme have their names listed in the Government Gazette along with the names of other naturalised citizens or citizens by marriage. These names are sorted alphabetically by first name.
“Government should consider researching alternative means that would ensure a better degree of confidentiality whilst ensuring some peace of mind to the programme’s detractors that the potential IIP citizens are being adequately scrutinised,” the regulator said in the report.
De Gabriele also took aim at banks, saying that such institutions must not “continuously put at undue risk the running of this Programme” and that they should be making sure that this process runs in the “smoothest way possible”.
He said that if the “number of over-rigid and very often insensitive and insensible measures that they are required to implement because of their international obligations” that are hindering this aim are not rescinded, then a “totally different legal route” to the collection of all contributions that are legally due to be passed on to the Maltese coffers within a particular time-frame should be found.
He said that the diligence process carried out on successful applicants by local banks is an “unwarranted and uncalled-for ordeal”, especially following the “months-long internationally acclaimed due diligence processes and procedures that are adhered to by the Malta Individual Investor Programme Agency before an applicant is finally accepted to become a citizen of Malta under this Programme”.