MEPs want ban on golden passports and strict rules on residence-by-investment

MEPs are looking to phase out European golden passports schemes, posing a risk to Malta's existing citizenship by investment programme.

The Committee on Civil Liberties, Justice and Home Affairs approved a draft text on Tuesday that sets out measures to address problems linked to citizenship and residence by investment schemes. 

The text was approved with 61 votes for, three against, and five abstentions. 

“Citizenship is a right, not a commodity to be bought and sold. Member states’ governments sell what is not theirs to sell, exploiting the reputation of the EU for profit,” rapporteur Sophie in ‘t Veld commented. 

MEPs are looking to phase out existing citizenship by investment (CBI) schemes, also called ‘golden passports’ initiatives. 

They stressed that such schemes are “objectionable from an ethical, legal and economic point of view, and pose several serious security risks”. 

The text calls for a “meaningful percentage” to be levied on the investments made, which would continue while CBI schemes are phased out.  

MEPs make a distinction between golden passports and golden visas, the latter of which offers residency rights in exchange for a financial contribution.  

For residence by investment (RBI) schemes, the draft report asks for common EU rules to harmonise standards and strengthen the fight against money laundering, corruption, and tax evasion.  

MEPs also demand stringent background checks on applicants, reporting obligations for member states, and requirements for a minimum physical residence and active involvement, quality, added value, and contribution to the economy for applicants’ investments. 

MEPs further demand a ban on intermediaries for these schemes, arguing that they are neither transparent nor held accountable. 

Malta offers its own citizenship by investment scheme, allowing high-net-worth people to buy their way to a Maltese passport.  

Applicants must provide a proof of residence in Malta for a period of 36 months, although this can be reduced to 12 months. They must also carry out an exceptional direct investment in Malta and donate a minimum €10,000 to a local NGO. 

MaltaToday collaborated with several local media houses on an investigation into Malta’s first Individual Investor Programme, which was coordinated by Henley & Partners. 

A treasure trove of data from the servers of the concessionaire revealed applicants would pay the bare minimum on rent for properties that were not fit for either purpose or price. 

The European Commission already urged Malta to stop its golden passports scheme. It warned government that it will be taking further steps in the infringement procedures against Malta with regards to the scheme.

Yet Prime Minister Robert Abela has repeatedly defended the scheme. Last Sunday, he praised the scheme for putting "millions, even hundreds of millions, into the Maltese coffers".

MEPs will debate and vote on the report in the next plenary session, slated for 7-10 March. If endorsed by plenary, the Commission will need to prepare a legislative proposal or justify its decision not to do so. 

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