Cover photo: Olivier Hoslet plus composites
Malta’s citizenship-for-sale scheme may face a tough challenge in the near future as the European Union’s Commissioner for Justice attempts to crack down on “dirty money” coming into the European Union from Russia.
Speaking to the Financial Times, Vera Jourova, the EU’s Commissioner for Justice, said the eight member states – including Malta – that have a citizenship-for-sale scheme would be facing increased scrutiny as serious concerns over the origins of the money being used to buy EU passports being to mount.
“It is a big concern when a Russian citizen who has worked his whole life in middle or senior management – where salaries aren’t very high – suddenly has the money to buy citizenship in Malta. In cases of any doubt, a person should not have the privilege of citizenship,” Jourova said.
Jourova will be publishing a report in the autumn that could set the focus on Malta’s scheme as a backdoor being used by Russian nationals with illicit money to enter the European Union.
“We have no power to ban such a practice, but we have an obligation to put high requirements on the member states to be careful. They are granting citizenship for the whole of Europe,” she continued.
The Justice Commissioner’s eyes will now turn to inspect the eight countries selling their passports: Malta, Austria, Greece, Cyprus, Latvia, Lithuania, Hungary, and Portugal.
Vera Jourova, the EU’s Commissioner for Justice
Malta’s scheme is especially ‘alarming’ for the European Union
The EU is moving ahead in their drive against money laundering in cooperation with the European Banking Authority and the European Central Bank, building on anti-illicit money provisions already in place.
One such provision would be updating the EU commission’s blacklist of countries with a high risk of money laundering, which Russia is currently not listed on.
With the EU already worried about foreign investors using illicit cash to buy themselves and their families Maltese citizenship at an affordable price, recent scandals such as the Pilatus Bank scandal has drawn even more attention to Malta.
Malta’s scheme in particular, which comes with a €650,000 price tag along with investments into the country, is seen as especially alarming due to investors being able to add family members for €25,000 to €50,000 per person.
While the EU cannot ban a country from having a citizenship-for-sale scheme, the can find a government at fault if they are found to not have carried out enough due diligence when screening potential investors.
“We want the states to do their due diligence and not to enable criminals to come to Europe and have equal rights as people who came years ago, who work, who pay taxes and have children and have to wait for citizenship,”Jourova said.
Malta’s citizenship-for-sale scheme has raised nearly €600 million from over 700 investors since 2014, Identity Malta said.