28/02/22

MALTA: Jurisdiction asked to stop selling passports to wealthy, Kremlin-linked Russians.

As published on euractiv.com, Monday 28 February, 2022.

The Maltese government has been asked to stop selling passports to wealthy Russians who have “benefited from Putin’s corruption”, by six civil society organisations, following Moscow’s illegal invasion of Ukraine.

Malta’s cash-for-passports scheme that sees wealthy foreigners acquire citizenship in exchange for renting or buying property and a cash donation has been long criticised by civil society and the European Commission due to fears of money laundering and other financial crimes. Investigations by journalists have also revealed lax due diligence checks and failure to enforce certain aspects of the application process properly.

Several ‘new’ Maltese citizens have been involved in corruption, embezzlement, money laundering and tax evasion.

The coalition of organisations called on the government to “support any and all targeted sanctions up to the highest level of the Russian government, as well as broad sanctions that will reduce Russia’s ability to conduct warfare” and “end the sale of passports to Russian elites, who have benefited from Putin’s corruption”.

In addition, they called for the indefinite suspension of bilateral agreements with Russia and the expulsion of diplomats who work in support of the illegal invasion of Ukraine.

Signatories include the Daphne Foundation, set up after the murder of journalist Daphne Caruana Galizia who was investigating and criticising the scheme at the time of her assassination, SOS Malta, Integra Foundation, aditus Foundation, Jesuit Refugee Service Malta, and Repubblika.

Russian nationals are one of the main recipients of the scheme, as reported by Maltese investigative portal, The Shift News. Recent citizens include the immediate family of Russian doctor Mark Kurtser, a member of a tight circle of influential figures around Putin, according to the OCCRP investigation “The Troika Laundromat”.

Another example is Andrey Mikhaylovich Turba and several family members. Turba is director of Transneft, one of Russia’s leading oil transporters. The company is currently subject to EU sanctions, The Shift reports.

These are, however, just the tip of the iceberg leading to concerns that wealthy Russians could use the purchase of a Maltese passport to avoid sanctions.

Back in 2018, the then EU justice commissioner Vera Jourova was “especially alarmed” over Malta’s scheme due to the prevalence of wealthy and influential Russians purchasing citizenship and, therefore, access to the EU.

Jourová said: “We want the states to do their due diligence and not to enable criminals to come to Europe and have equal rights as people who came years ago, who work, who pay taxes and have children and have to wait for citizenship.”

Cyprus stopped its citizenship by investment scheme in 2020, and Bulgaria is set to cease its scheme. This leaves only Malta, which has been repeatedly urged by Commission to halt the programme. The government, however, insists that it will continue.