Malta’s passport scheme carried “an element of risk”, the State’s anti-money laundering agency (FIAU) deputy chairman Anton Bartolo told MEPs recently.
The FIAU, which is tasked with preventing money-laundering and terrorist financing, told MEPs investigating the rule of law in Malta that it received very few suspicious transaction reports related to applications for passports under the scheme.
The FIAU told MEPs that it was sometimes asked for help with due diligence on passport applications.
Dr Bartolo said due diligence checks were also carried out by the banks and real estate agents, when properties were bought.
Passport buyers are made to either buy or rent a property, as well as invest in government bonds.
In its recommendations about how the rule of law in Malta could be improved – which were published two weeks ago – MEPs said the European Commission should assess the implications of the scheme through which Malta sold European citizenship and Schengen residence permits.
The scheme has been criticised for the opaque way in which rich foreigners are given their passports
MEPs said the Commission should assess if the scheme distorted the internal market and proved a security risk to the European Union, as well as fomented corruption, importation of organised crime and money laundering.
The Commission should also assess fiscal incentives which treat local income of individuals or corporations differently than international income, the MEPs said.
The government last week launched a public consultation on the extension of the controversial scheme, which was supposed to be capped at 1,800 applicants.
Rather than asking if the scheme should be extended, the consultation asks whether the amount of people allowed to buy passports should be legally capped or not.
The scheme has been criticised for the opaque way in which rich foreigners are given their passports.
The government has even refused a freedom of information request asking for a breakdown of the nationalities of passport buyers.
Prime Minister Joseph Muscat last month refused a request in Parliament to identify the names of people who had bought their Maltese passports for €650,000. Dr Muscat said in Parliament that the law regulating the scheme did not allow for such distinctions to be made.
The European Commission is set to present a report on the transparency of all citizenship schemes operating in the EU.
The Commission has said it is closely monitoring the application of all such schemes granting national citizenship in all Member States.