Golden Passports: How Malta Plays With European Rules

The Maltese government’s golden passport policy is taking shape with greater precision. Since last October, Malta has been the subject of an infringement procedure launched by the European Commission for its controversial “golden passport” program aimed at attracting wealthy investors. Against the sum of one million euros, it is, in fact, possible to obtain a Maltese passport, on condition of having resided on the island for at least one year.

But this condition seems far from being met. In 2017, journalist Daphne Caruana Galizia, who had dug the Maltese part of the journalistic investigation into the Panama Papers and had been the source of revelations on scandals involving several relatives of Prime Minister Joseph Muscat, was assassinated. Since then, a consortium of journalists, named Daphne Caruana Galizia Foundation, has continued its investigative work to lift the veil on the repeated abuse of these golden passports against a background of widespread corruption.

A firm specializing in “citizenship plans”

This is how the Guardian reveals a whole series of information extracted from edifying documents sent to the Daphne Caruana Galizia Foundation. These documents are thousands of internal emails to the specialist consulting firm Henley & Partners. This cabinet, considered, according to the Guardian, as the industry inventor of “citizenship plans” in several countries (including tax havens), was founded by Swiss lawyer Christian Kälin, who recently hit the headlines in France by inviting lunch at Le Meurice in full pandemic a senator, pinned by Mediapart at the exit of the palace.

For several years, Russian, Chinese and Saudi billionaires have therefore guaranteed unlimited access to the Schengen area by obtaining a Maltese passport, without respecting the conditions imposed by the EU. Via Henley & Partners, a certain number have been able to put in place a series of pretexts for effectively not imposing a link with Malta.

“The number of days on site must be at least 14”

In 2014, representatives of the European Commission denounced the Maltese citizenship system, calling for EU countries to only issue passports to people with a genuine connection to their country. This is where the firm comes in, supporting Malta in setting up the scheme. Two weeks after the charges, Malta announced that a one-year residency would be required to acquire a passport. But without ever defining the notion of “residence”.

So the Guardian was able to get hold of several hundred letters of intent from their clients requesting the Maltese passport not indicating their intention to reside in the country. In internal emails to the firm, many clients insistently ask how they can escape this rule. “Will staying in Malta for a period of 7 to 14 days be enough? »Even asks an employee to his superior, at the request of a customer.

“The applicant does not necessarily have to be present in the country,” one told another client. On the other hand, in order to create an authentic link with Malta, the government would like to know the number of days of presence in the letter. The number of days on site must be at least 14. ”Of the 250 letters consulted, applicants undertake on average to spend 16 days on the island.

A 2 bedroom apartment for 12 people

The Maltese State is asking each applicant, within the regulatory investment of one million euros in the country, to purchase a property of at least 350,000 euros or five years rental at 80,000 euros . These real estate investments, supposed to constitute an anchoring of the applicant in the country, are often, in fact, another pretext and the goods in question, like a large part of the real estate stock of the whole island, are doomed to remain empty.

The Guardian cites the example of a Chinese billionaire who rented an apartment with two bedrooms for 1,500 euros per month and supposed to accommodate a dozen people, including six children, who apply for Maltese citizenship. Henley & Partners charges its clients for real estate management, an absurdity to some. In emails revealed by the British newspaper, a South African businessman loses his temper: “The apartment is not being used, no one will go there for years!” ”

When questioned, the firm Henley & Partners does not deny that certain clients have “barely” made an appearance and affirms that the notion of “genuine link” was never defined in European laws. The Maltese government takes, he said, “the final decision on all citizenship applications.” “We have assisted the Maltese government in setting up a remarkably successful sovereign financing and economic innovation platform, raising hundreds of millions of euros in capital,” adds the cabinet.