Leaked documents expose loopholes in Malta cash-for-passports scheme JURIST – News – Legal News & Commentary

April 23, 2021

Leaked documents Wednesday exposed Malta’s cash-for-money scheme, which provided loopholes for Chinese, Saudi and Russian millionaires to attain EU passports. The documents were exposed by the Daphne Caruana Galizia Foundation following material obtained from a whistleblower as part of an investigation that began in 2013. In this scandal, foreign nationals were given passports following lucrative investments worth millions of euros and a requisite three-week stay in the country.

According to the Foundation’s investigation, while Malta’s Parliament was in recess, Prime Minister Joseph Muscat introduced a scheme for individuals to buy Maltese passports behind the scenes. He did so by establishing a new state agency known as Identity Malta, which incorporated all departments responsible for passports, identity cards, and work and residence permits. He subsequently signed an agreement with Henley and Partners to take over a passport sales program. This endeavor has been reported to have made over EUR 1 billion in the first 18 months of operation alone.

According to the EU Commission, so-called “golden passports” undermine the essence of EU citizenship, and the commission has stressed that member states should only provide passports to individuals with genuine connections to the country.

Following the Foundation sending Henley & Partners a list of 40 questions, they received a number of detailed classified responses and a single statement for publication. According to the corporation, they had simply assisted Malta in “a remarkably successful sovereign and economic innovation platform, raising hundreds of millions of Euros … without which healthcare, social and cultural investments would not have been possible.” They further claimed that allegations of a “systemic problem” are “fundamentally false and potentially defamatory”.

Demand for passports was especially high from Russian buyers following EU imposed sanctions on the state in 2014 with regard to the Crimean Referendum and Russia’s military intervention in Ukraine, whilst demand was also identified from individuals affected by former US president Donald Trump’s “Muslim ban.” There has also been recent spike in UK citizens buying passports following the 2016 Brexit referendum.

Cyprus, which is alleged to be running a similar scheme, is facing infringement proceedings, too.

Source

Most Read News

January 24, 2020

Professional Tax – new tax for Cyprus companies

At the end of 2019 Cyprus municipalities introduced a new tax for Cyprus companies called Professional Tax.

May 18, 2020

CRS and FATCA: extension of reporting deadlines

In 2020, the deadlines for submitting financial statements in accordance with CRS and FATCA standards has changed.

July 10, 2020

Cyprus: Since 1 of July Contributions to the GESY Fund Have Increased

From March 1, 2020, contributions to the Fund of the state health insurance system of Cyprus GESY were supposed to grow as part of the second stage of the reform of this system.

December 03, 2019

Happy Lawyer’s Day!

December 3 is the lawyer's day in Russia. Congratulations to our colleagues on their professional holiday!

February 24, 2019

Amendments to Cyprus Company Law

The Cyprus Department of Registrar of Companies and Official Receiver (ROC) announced amendments to the Cyprus Company Law.

May 08, 2020

CySec: Changes of the Due Date for Some Obligations in Cyprus

The financial regulatory agency of Cyprus (CySec) has changed some due date obligations for issuers, providers and funds: The due date for the obligation of issuers to publicise the annual financial statements for 2019, is postponed for the 30 of June 2020. The due date for [...]

April 15, 2020

Professional consulting support of our specialists

Taking into account the current situation, our clients have a lot of different issues that require professional consulting support on-line.

February 17, 2020

OECD has published a consultation document on the review of Country-by-Country Reporting

OECD released public consultation document that is based upon the mandate set out in the BEPS Action 13 report, and focuses on issues concerning the use of CbC reports by tax administrations for the purposes of a high level transfer pricing risk assessment. The public consultation document [...]