The home affairs ministry has hit back at suggestions that Malta’s passport scheme could accept money from “questionable individuals” in Asia to make up for the loss of business from Russia.
A former UK government adviser flagged concerns about the scheme in submissions to the UK’s foreign affairs committee, which is investigating global dirty money flows.
In written submissions to the committee, Shanker Singham warned that efforts by Malta to fill the financial void left from passport sales to Russians could see it turn to equally dubious sources of passport money from China and central Asia.
Malta suspended the sale of passports to rich Russians in response to the country’s invasion of Ukraine.
However, a spokesman for the home affairs ministry insisted that the competent authorities have always conducted “comprehensive due diligence checks” which are, by standard, one of the most robust in the world.
Local and international databases are consulted in the process, whereby all applications are also referred to world-renowned due diligence service providers, the ministry spokesperson said.
These service providers conduct on the ground checks and applications are refused if it is found that the applicant poses any risks, he added.
“Chinese and other Asian nationals already have the opportunity to submit an application for citizenship by investment. Applications by questionable individuals are refused, irrespective of the nationality of the applicant,” the spokesperson said.
The government has, so far, pushed back at European Commission demands for the scheme to be halted due to the corruption, money laundering and tax crime risks it poses for the entire EU.
Singham, once an adviser to former secretary of state Liam Fox, charted in his submissions to the committee how, historically, Malta has been used as a site for Russian funds as well as “the EU visa of choice” for Russian oligarchs.
“Cyprus has long been the target for Russian oligarchs’ funds but it does appear that the Kremlin is turning its attention to Malta,” according to Singham.
He pointed out it is “highly likely” that a decision by Malta to reject what is known as a status of forces agreement with the United States was secured because of Russian and Chinese pressure for Malta to maintain its neutrality.
No further evidence was provided by Singham to back up the claim.
The US has signed such agreements with several other countries, designed to cover military cooperation or visits by military forces, which, in the case of Malta, would be ship visits.
Singham also warned that the failure to satisfy core good governance and rule of law requirements could see a further backslide in Malta’s fight against financial crime.
Failure to do so could see the country attract illicit money flows, rather than licit ones.
“Malta has to choose: there is no space between a licit node and an illicit one,” Singham says.