03/03/22

MALTA: Jurisdiction scraps citizenship scheme for Russians, Commission to monitor.

As published on euractiv.com, Thursday 3 March, 2022.

The Maltese government has suspended its cash-for-passports scheme for Russian and Belarusian citizens following pressure from the EU and civil society over fears oligarchs linked to the Kremlin were buying their way into the bloc.

Malta and Bulgaria are the last remaining countries in the EU that sell citizenship in return for cash and investment in the country, usually buying or renting property. The scheme has been under fire for years as many ‘new’ Maltese citizens have been found to have been involved in criminal activity. Russians are the most common purchasers of Maltese citizenship, giving them the right to live and work anywhere in the EU.

Calls to shelve the scheme were heeded by Cyprus in 2020, and Bulgaria, who are currently revoking their version of it. Only Malta remained steadfast that it would continue, triggering an infringement procedure from the EU in 2020.

But the pressure appears to have been too much for the Maltese government, who released a statement on Wednesday noting that due to “recent developments”, it has become impossible to carry out due diligence on applicants.

“Consequently, Community Malta Agency and Residency Malta Agency have suspended, until further notice, the processing of applications for the above-mentioned statuses from nationals of the Russian Federation and Belarus,” the government said.

The measures will also apply to renewals for residency by investment, and cases will be considered case-by-case and with enhanced due diligence.

A Commission spokesperson told EURACTIV that “Such schemes raise inherent security, money-laundering, tax evasion and corruption risks for the Member State concerned and for the Union as a whole. We consider that operating investor citizenship schemes that systematically offer citizenship in exchange for pre-determined payments and investments, without a genuine link with the Member States concerned, violates EU law.”

They added that the Commission would not hesitate to take further steps on the matter, if and when needed.

On Monday (28 February), a coalition of NGOs became the latest to call on Malta to stop selling EU citizenship to Russian citizens. Local media, including investigative portal The Shift News, investigated ‘new’ Maltese citizens for years.

They found a pattern of manipulated application requirements, criminal activity, and links to leaders including Russian President Vladimir Putin.