Bad publicity and stiff competition is to blame for a persistent drop in applications for Malta’s cash-for-passports scheme, according to the regulator. 

Carmel De Gabriele issued the warning in the sixth annual report on the Individual Investor Programme that gives citizenship to wealthy people who invest in the country.

Some 311 applications were submitted between July 2018 and June 2019, which is 19 fewer than the previous year.

From a financial perspective, revenue from the controversial passport scheme was €271.6 million which equated to 2.11 per cent of the country’s wealth (GDP).

This comprised the €650,000 fee per main applicant, and other obligations on applicants such as the cost of buying or renting a property for five years, and an investment of at least €150,000 in Government Stock.

While most of the applications were still pending by the time the report was compiled, the number of approved applications stood at 237.

This means that 58.6 per cent of the pre-established target of 1,800 successful applications, set when the programme was launched in 2014, was reached by June last year.

In total, since the programme’s launch in 2014, the scheme generated a revenue of €834.8 million of which €514 million were deposited in a dedicated National Development and Social Fund while €220 million went into government’s account (Consolidated Fund).

In his remarks, the IIP regulator noted that the downward trend in applications persisted.

While competition from similar programmes was to blame, Mr De Gabriele said this was also the result of “highly inconsiderate bad publicity which has continued to prevail unduly both nationally and internationally towards such programmes”.

He also pointed to influential international organisations and institutions which in his opinion were all out to deal a fatal blow to such schemes based on “totally unfounded pretexts and pretentions”.

The regulator dedicated part of his report to react to claims levelled on the IIP, particularly the level of due diligence which applicants were being subjected to.

While refuting claims that due diligence was lax, the regulator said the IIP agency, the State entity which handles the programme, had reported 14 cases of suspected criminal activity which surfaced while processing applications.

These were reported to government’s anti-money laundering agency (FIAU) while collaboration was sought in another 120 cases.

Mr De Gabriele also expressed his “utter dismay” that none of the fact-finding missions from the European Commission and the European Parliament and other institutions which were highly critical of the IIP, had ever “bothered” to request a meeting with him or consulted with the annual reports.

As for a public consultation process launched two years ago, the regulator said the results were “inordinately delayed” to await for developments stemming from impending reports by the European Commission. 

The regulator expressed his confidence that IIP applications would increase in the coming months.

Who is buying Maltese citizenship?

(July 2018 – June 2019)

• Applications submitted: 311 (having 758 dependents).
• Origin: Europe 46.3 per cent, Asia 32.8 per cent, Middle East and Gulf 10.9 per cent,  
   others 10 per cent.
• Applications approved: 237.
• Applications rejected or withdrawn: 115.
• Naturalised persons: 266 (down by 45 from previous year).
• Revenue from property: €13.8 million from acquisitions, €19.1 million from    rental agreements.
• Revenue from government stocks: €33.8 million.
• Revenue from contribution: €162.7 million.
• Donations to Maltese entities: €799,193.

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