First they resisted, then they caved in. With Russia shelling Ukrainian civilians, there was no way Malta could insist that its citizenship and residence schemes could continue to be sold to Russians (and Byelorussians).
The initial resistance was based on the line that we don’t really sell passports; we attract investors who become citizens. The official reason for the U-turn is that Malta can’t conduct proper due diligence in the current belligerent environment.
The scruples about due diligence are new. Several suspected and confirmed money launderers got past the vetting in the past.
And the current problems with due diligence should have been apparent even when the passport junior minister, Alex Muscat, was denying that suspending the scheme was necessary. When the Opposition leader, Bernard Grech called for the suspension, Robert Abela smeared him as racist for supposedly implying all Russians are bad.
Why did the government resist? And why, when it inevitably changed tack, has it offered such a flimsy excuse? Why not say what all other Europeans are saying – that these are sanctions – and take the moral high ground?
Because it can’t. If it did frame the suspension as sanctions, it would be an admission that our ‘citizenship by investment’ scheme is based on a lie. The last withered figleaf covering up the scheme would be blown away.
The moment Malta says it’s suspending passport sales to squeeze wealthy Russians, it’s admitting that we’re normally in the business of pleasing oligarchs. We pimp our passports as a gateway to Europe, so that the Russian haute bourgeoisie can do its shopping in the continent’s capitals, send its children to western European schools and launder its money.
Obviously, that’s not the official line peddled by Malta. The passport junior minister denies we have a ‘golden passport’ scheme. Malta insists that we are not selling passports but, rather, attracting ‘talent’ – high net-worth individuals who will contribute to Malta’s development by residing here and becoming, in some sense, one of us.
No, really, believe us, we don’t sell passports to Russians so they can go elsewhere using a backdoor key. No, really, we import Russian talent to expand our own national horizons. In the process, they just happen to acquire a passport, which is a mutual blessing, as then our embrace is total.
That’s the official story anyway, and the government continued to stick to it. By its logic, suspending passport sales to Russians would simply punish Malta by depriving it of talented new citizens. Oh, and any critic who says otherwise is a racist who claims all Russians are bad.
No one, of course, believes that humbug. There’s plenty of documented evidence that the residence requirement is a sham.
Malta had to come up with the humbug about due diligence, which no one believes anyway- Ranier Fsadni
As for Muscat’s boast that our vetting is among the best in the business – if true, all that shows is how careless the vetting is elsewhere. If we have the best vetting, and still the results are so poor, then perhaps the industry is corrupt at its core, not just accidentally.
Our European and international partners think as much. If they’ve let us get away with the scheme until now, it’s because there are other snouts in the trough.
Plus, powerful states are often reluctant to call out a small state’s lies in public. It smacks of imperialism. Instead, pressure is applied behind drawn curtains.
Sometimes, though, the curtains are pulled aside. We’ve been greylisted because of distrust in our political will to prosecute money launderers. If we’re caught busting sanctions (as with Pilatus Bank and Iran), then the US reacts.
Sometimes, it’s by declaring a major national project – the Electrogas power station – as mired in ‘significant corruption’ and putting a black spot on Konrad Mizzi and Keith Schembri. Other times, it’s by publicly offering help with the investigation into the Daphne Caruana Galizia assassination. Or, as it did last week, by sponsoring a conference on how Maltese investigative journalism can be supported in the face of institutional obstacles, harassment and intimidation.
So, if Malta were to sell a single passport to a Russian now, it’s not just the EU we’ll have to worry about. The US will not be kind to anyone who undermines its plan to hurt the Russian bourgeoisie so that it turns on Putin.
The foreign minister, Evarist Bartolo, says that our passports have been sold to people who want to get away from Putin. Unless they’re asylum seekers, that’s neither here nor there. EU passport sales releases the pressure of discontent that Putin faces. The US, now, wants sanctions to fuel popular discontent in Russia.
Selling even a single passport assumes, of course, that, somehow, Malta would be able to get round the sheer difficulties of getting paid for it. Wealthy Russians are being ‘unplugged’ from the world’s financial system. Malta cannot get round those sanctions without busting them or defying their spirit – a bigger sin than selling the passport.
In practice, Malta would have had to stop selling passports to Russians anyway. But instead of joining other Europeans on the moral high ground, it had to come up with the humbug about due diligence, which no one believes anyway but which still inflicts unnecessary reputational damage.
Our government is trapped in the lie it has itself spun. In order to keep up appearances, it must damage its own appearance.