IIP: Malta rakes in €200 million from itinerant elites

In its last count, requested this week by MaltaToday since its ‘investor by citizenship’ programme was hauled over the coals in the international press, Identity Malta said it had booked €200 million from its passport sales so far.

It is a remarkable figure, albeit one that so far falls well short of a purported €1 billion target when Malta would have sold passports to some 1,800 members of a very liquid and mobile global elite.

Despite Identity Malta’s assertions of its strict due diligence process of screening applicants, there is little appetite in the rest of the EU for this sort of money-spinner. In Brussels, Politico last week led the gamut of critics of Malta’s Individual Investor Programme. “I am absolutely disgusted,” the Portuguese socialist MEP Ana Gomes said of the IIP. Her country also sells residence visas to investors who spend €1 million and create jobs. Gomes, also a member on the European Parliament’s committee tasked to analyse the fallout of the Panama Papers, said she has demanded “an investigation by the EU Commission to look into member states investor schemes, not just Malta’s.”

It is not hard to understand why the brazen commodification of a public good like citizenship angers people. Suddenly, it becomes no longer necessary to be a taxpayer and active participant in a community because you can throw money at whatever you want.

And after Luxleaks and Panama Papers, the breadth of the global rich’s avarice is now being actively targeted by MEPs and European governments who want to clamp down on tax avoidance.

But in Malta, the Labour government has bound itself to the great white hope of the IIP. Prime Minister Joseph Muscat is contractually bound to speak in the international Henley roadshows (next stop, London in November, together with the President of the Republic). And Identity Malta jealously guards the identity of these onepercenters in a way that makes a mockery of good governance.

A list of naturalised persons which must be published at law at the start of each year, today gets published mid-year; the surnames are not listed in alphabetical order, and instead it is the first names that are listed alphabetically, to make it harder to spot celebrity surnames or conspicuous applicants who come as a family; and IIP citizens are not distinguished from citizens who have been living in Malta for years before finally having been naturalised.

On this, MaltaToday has filed a Freedom of Information request with Identity Malta as well as an official complaint with the Ombudsman seeking explanations on the transparency of the scheme.

Identity Malta has received 772 applications since 2014 – roughly half of its expected 1,800 cap on ‘investor citizens’. 

Identity Malta chief Jonathan Cardona adds that there has been a refusal rate of approximately 25%, a rate that could tally with previous statements from concessionaires Henley & Partners that over 1,000 applications had been received.

Of those 772 applications, which have not made all applicants Maltese citizens, a total of 202 main applicants have been fully naturalised, bringing with them 503 dependants.

Cardona insists the IIP adopts a rigorous due diligence process, with security checks that involve several layers of international police and security agencies. “The IIP has a dedicated regulator which has full access to all documentation, which is unprecedented globally,” Cardona says.

But what counts here is the cash. Cardona says that from all these applications, Identity Malta has so far booked over €200 million, which includes cash not yet disbursed since the applicants have not yet been naturalised.

Of this cash, €94 million has been posted in a ring-fenced posterity fund which is headed by David Curmi, the former president of the Chamber of Commerce. Another €40 million has been allocated to the government’s consolidated fund.

A government source, who expressed reservations on the way Malta’s IIP gets bashed in the international press, said the media looks at the prism of migration from many different angles.

“The data is available to all, and in 2014 over 780,000 were granted citizenship by an EU member state. We’re taken to task over a few hundred citizenships that have undergone a strict due diligence process, but nothing is asked, say, of the UK, which in 2014 alone granted citizenship to 115,000 people.”