Maltese Golden Passports Open Access to EU to Super-Rich Russians, Chinese, Saudis

Super-rich Russians, Chinese and Saudis have secured unrestricted access to the EU via a Maltese cash-for-passports scheme that requires them to spend less than three weeks in the country, a leak from a passport brokerage has revealed.

The cache of thousands of emails and documents from Henley & Partners provides an unprecedented window into the mechanics of so-called “golden passport” schemes, whereby countries sell citizenship to wealthy foreigners.

The leak reveals how some applicants seeking to buy a Maltese passport through a government investor scheme were able to create a pretence that they were “resident” in the country for a full year by renting apartments and then leaving them empty.

The loophole enabled some customers, who pay more than €1m under the scheme, to successfully claim they had a “genuine link” to Malta – a key legal requirement – while spending just a couple of weeks holidaying there and making a few other superficial gestures such as renting a yacht or donating to a local charity.

The disclosures are likely to alarm the European commission, which recently initiated the opening steps of potential legal proceedings against Malta over its sale of golden passports. The commission has accused Malta of selling citizenship – which enables full access to the EU – to individuals with little or no connection to the country.

The Maltese government rejects any suggestion that its residency requirement is a sham. It argues that it, rather than the EU, has the final legal say over who can be issued with a passport, and that applicants are security-checked before receiving a residence permit.

But Henley’s files reveal that in the early years of the scheme, many applicants told the government upfront that they planned to develop only the most superficial links to the country, with most disclosing that they planned to spend just a few weeks in Malta during the supposed 12-month residency period.

The Henley data has been shared with a consortium of media partners, including the Guardian, by the Daphne Caruana Galizia Foundation. The non-profit was founded two years ago and named after a Maltese anti-corruption journalist who was murdered in 2017

Henley & Partners, which is chaired by a Swiss businessman, Christian Kälin, arguably invented the modern “citizenship planning” industry, which is worth an estimated $3bn annually. Its first major client was the government of St Kitts and Nevis in the Caribbean, where it was hired to launch a citizenship-by-investment scheme in 2006.

It played a key role in the creation of Malta’s golden passport scheme, advising the government on how it should be structured. Originally Henley was to have sole rights to administer client applications, though this was relaxed after a political outcry.

Malta announced its plan to sell citizenship eight years ago, prompting expressions of concern from the EU that buyers would acquire unrestricted access to the Schengen zone, which allows free movement between member states.

In January 2014, a European commission justice spokesperson delivered a speech denouncing the proposals and stressing that EU members should provide passports only to individuals with a “genuine connection” to their country.

The impasse was avoided when, two weeks later, the commission and the Maltese government issued a joint statement announcing that anyone buying Maltese citizenship would need to be resident in the country for a full year, demonstrating the authenticity of their links to their new home.

“No certificate of naturalisation will be issued unless the applicant provides proof that he/she has resided in Malta for a period of at least 12 months immediately preceding the day of issuing of the certificate of naturalisation,” the statement read.

However, the Maltese golden passport scheme does not define “residency”. Government officials have previously been evasive when asked for what proportion of the 12-month period applicants were expected to be physically present./Guardian

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