Government rules out renewing IIP after reaching quota

Government spokesperson denies reports that citizenship scheme will be reopened after reaching 1,800 quota.

Government spokesperson Kurt Farrugia denied that the Labour government would reopen the Individual Investor Programme (IIP) once the 1,800 quota is reached.

Today, Brussels-based newspaper EU Observer carried out an interview with Farrugia over the controversial citizenship scheme in which he was reported to have "declined to rule out extra quotas in future."

However, speaking to MaltaToday, Farrugia said: "I rule out that the programme will reopen."

He said the programme is open to 1,800 main applicants, adding "the programme will close after the 1,800 main applicants is reached. There will be no extra quotas after this limit is reached."

The revamped citizenship scheme will require wealthy foreigners to invest at least €1.15 million in order to obtain a Maltese passport. Applicants must also invest in property and government bonds and shares before being granted citizenship.

Prime Minister Joseph Muscat said the scheme would close once the 1,800 cap is reached. This capping however does not include additional passports which successful applicants might obtain for their family members.

The EU Observer said that the British consultancy firm, Henley & Partners, which was engaged by government to design the programme "stands to make tens of millions of euros for helping Malta create up to 20,000 new EU citizens-on-paper."

Every successful applicant can buy additional passports for children up to 26 years old, for their spouse, and his or her spouse's parents and grandparents, for between €25,000 and €50,000 per head.

Following the programme's revamp, Prime Minister Joseph Muscat had also said that the scheme will no longer be led by Henley and Partners whose contract would be revised.

However, according to the EU Observer, apart from designing the scheme's legal and administrative structures, Henley will also provide day-to-day services, such as marketing, and vetting of potential buyers.

"In return, it will get a 4 percent cut of the €650,000, €50,000 and €25,000 passport fees. Henley will also compete with other Malta-based agencies to process sales and plans to charge buyers €70,000 each for its services. The set-up means that even if nobody adds on relatives, and even if Henley sells just 10 percent of the 1,800 places, the firm, which is based in Jersey, a British tax haven, stands to bring in some €60 million," the EU Observer said.

In the interview published by the newspaper, Farrugia also denied that the programme was launched to patch up the country's economy.

"We have a strong economy. We're doing this to attract reputable people who can invest in the country," Farrugia said.

The scheme is expected to yield over €2 billion, with around half the amount invested in a National Development Fund.

Speaking to the EU Observer, Henley's chairman Hugh Morshead, said that the 4% cut was justified because "we've done a lot of advising to the government in terms of the legal set-up, the promotion, and actually setting up our own office in Malta. We've done all this without being paid so far, so it's a commercial risk we've taken."

The scheme has generated worldwide interest with the Nationalist Party leading a fierce campaign in opposition to the scheme.

The PN has vowed to repeal the scheme once it returns to power, insisting that the scheme was putting up Maltese citizenship for sale instead of attracting long-term investment.

The scheme was revamped by the Labour administration after talks between the government and the opposition collapsed.

Opposition MPs have lambasted the government for giving an impression that the country was in a desperate need for a cash injection and accused Muscat of tarnishing the country's reputation.

However, in the interview, Farrugia rebutted criticism and insisted that applicants will undergo a severe screening process which includes a four-stage due diligence process. Farrugia noted: "We're confident that the due diligence process is very rigorous."

The EU Observer added that the scheme is being talked about in many countries, including Libya, Saudi Arabia and Syria, and reported that Henley as saying "there will be enhanced due diligence on politically exposed persons."

Yet, the Belgian newspaper said that "given the worst case scenario - a crime, or even an act of terrorism, committed on EU or US territory by a newly-minted Maltese national - the rigour is questionable, however."

Moreover, the report said that, emails sent out by Henley and information put up by other agencies highlight the nature of the scheme as "a back door to other jurisdictions."

In January, the newspaper posed as a potential Iranian buyer in an email to Henley's Dubai office. The British firm wrote back saying: "Malta will be very strict to not face a risk in the EU. Therefore only persons with a top background will be successful ... We do not know yet if they will accept Iran citizens. We have to see." Henley also highlighted that there is "no residence requirement."

The Henley boss was also reported to have admitted that the fast-track scheme had been scrapped, but his Dubai office said: "The funds (the €650,000 fee) are lost for the applicants but applicants get citizenship within 3-6 months!"

But Zentura, a Maltese agency, which is also keen to scoop business, is being more brazen, the EU Observer said.

The company's webpage says: "What is unique about Malta is the complete lack of restrictions which makes this programme the fastest to obtain European citizenship."

Instead of the government giving the impression that Malta is in dire financial straits, it is the PN which is giving the impression that it is in dire panic mode, since it believes that the IIP could be the end of their electoral hopes for 2018 and beyond !!!
Will somebody throw cold water over the Maltese citizens so they can wake up from this nightmare? Here you have the same incompetent government spokesman who is barely noticed when standing, yet every time he opens his mouth, this government finds itself in a quagmire. How can Kurt get quoted by the EU Observer saying one thing and then tells the Maltese papers something completely different Surely he does not believe that the Maltese people do not have access to the foreign press especially one that is based in Brussels? Getting back to the citizenship for sale storm that seems to continue thundering over Malta’s creditability with EU states and other concerned countries, why has this government chosen Kurt Farrugia to defend this citizen scheme when they are very well aware that Kurt is not fit to discuss any matter with foreigners. Everyone who has been following Kurt’s administration adventures, already recognizes that his inspirations in speaking or handling matters of state for Joseph Muscat has not been not only lacking but has put the Prime Minister and his policies on the defensive. Let’s face the facts and agree that if one turned off the lights in Castille and left the lights on in Farrugia’s office you will still have a hard time finding any soluble direction in this administration. In other words he is far from being the brightest star on the PL galaxy. The real question that every citizen should be asking the Prime Minister is very simple and one that most laborites seemed puzzled about. If laborites were confused why Kurt Farrugia was chosen as spokesperson for Joseph Muscat, after only ten months in office it has become extremely clear that the selection was suspect and has failed completely. The sooner the Prime Minister’s office finds time for a change the better this administration can continue to eliminate dysfunctional operations. Why does Joseph Muscat keep this lethargic spokesman around Castille considering the damage he does every time he is left alone with the press? Isn’t it bad enough that Maltese citizens will suffer the consequences of this badly thought out citizenship scheme that will put a lot of pressure on Maltese citizens traveling to foreign countries where safety and security are given priority? At this time all this island needs is someone as inadequate and irrelevant as Kurt Farrugia creating harmful foreign affairs focus towards the Maltese islands.
Win win situation
PN will renew it once in Government, MARK MY WORD