Passport Papers | Secrecy and bid to avoid scrutiny was always the mark of IIP

New revelations from the Passport Papers, a cache of documents from Malta’s passports-for-cash concessionaires Henley & Partners, confirm efforts by the Maltese government to minimise as much as possible public scrutiny of the IIP – the Individual Investor Programme.

The original programme designed by Henley was intended to make secret the acquirers of these elite passports, with the Labour administration only adding later a residency requirement.

Two months after the citizenship bill was voted into law, a clause was added for applicants  to provide proof of residence before being granted the certificate of naturalisation.

MaltaToday had initially reported on the residency shortcomings in June 2016, revealing how wealthy IIP applicants were renting out cheap apartments purely as a box-ticking exercise. Chinese billionaire Liu Zhongtian had been renting a Naxxar maisonette on Triq il-Forga, while an Qawra holiday apartment was supposed to be housing Russian entrepreneur Vjacheslav Solvyev.

The Passport Papers takes this a step further. The data shows that applicants were spending an average number of 16 days in Malta prior to receiving their passport.

Additionally, the absolute majority applicants opted for a lease agreement that was on, or just above, the legally required amount to qualify for citizenship: five years at an annual €15,000 rent, instead of the minimum €350,000 property buy.

One applicant even went on to secure a rental at a Kempinski serviced apartment in Gozo’s San Lawrenz for €89 per month – hardly the thousand-euro investment expected from the global elite.

Proving “genuine links to Malta” was another pretence in the IIP’s operations. Documents from the Henley cache reveals a scoring system that was developed by Identity Malta, allowing applicants to somewhat bypass the residency requirement by instead purchasing yachts or handing out donations to local charities.

One can only look back at former justice minister Owen Bonnici’s 2014 statement with irony when claiming that the residency requirement will be implemented in “good faith”.

Even the mandatory publication of new Maltese citizens also turned out to be humbug. A confidentiality clause was initially added to the IIP whereby names of new citizens purchasing their passport through the scheme would remain secret. Louis Grech, the deputy prime minister at the time, said that this clause was added on the advice of citizenship experts who argued that confidentiality was important for high net-worth individuals.

Instead, government opted publish the annual list of naturalised citizens in a manner that made it close to impossible for readers to identify big-name applicants who purchased citizenship under the golden passports scheme.

The IIP applicants were meshed into the annual list of naturalised citizens, but instead they were listed alphabetically by name, and not by surname as before, to make it difficult to draw connections between big-name citizens.

Five years later, we have revealed how some wealthy applicants were able to have their name omitted entirely from the Government Gazette after meeting with Joseph Muscat.

Malta is what it is: a microstate that lacks natural resources, making it reliant on a well-resourced industry of financial services, remote gaming, and tax benefits to give it competitive edge in a globalised world.

No one can deny that the IIP has provided government with a significant stream of revenue, as well as some €600 million for its posterity fund, that would eventually help fund public projects and charity donations.

In a European economy where the balance of trade is skewed towards large, manufacturing economies, the ‘crumbs’ from tax competition can add up to 20% of GDP.

But with the hindsight provided by the Passport Papers, neither can it be denied that the public interest was ever the guiding principle when implementing the programme.