Malta’s citizenship scheme regulator has not found any evidence to back a law firm's claims that it is friendly with government ministers.   

Chetcuti Cauchi Advocates had its licence to sell passports to investors suspended in September after its agents were caught on camera making a series of claims to an undercover journalist from French TV show Enquête Exclusive (Exclusive Inquiry).  

But in a statement on Tuesday, Carmel De Gabriele, the regulator of the Individual Investor Programme said that his investigation turned up no red flags.

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In a report submitted to the prime minister, the regulator said that following a review of all IIP applications submitted by the law firm, “an analysis of these observations has not uncovered any red flags which support, in all or in part, the purported allegations”. 

“No records were found of applicants (for Maltese citizenship) having a criminal record or of the applications being presented for the minister’s consideration more than once. 

“There was no indication of collusion between the agent and the responsible minister (or with the agency) or that the former, at any point since the start of the programme, had ever received preferential treatment,” Mr De Gabriele said. 

The claim that the agent “enjoyed a hundred per cent successful rate” was also found to be incorrect, the regulator said, since it was calculated that 16 per cent the applications were not approved. 

“There was also no evidence that the agent attempted to find a way to get around the selection criteria,” he said. 

While pointing out that no issues were identified during the vetting exercise, the regulator’s office still made a number of recommendations to improve the processes and pre-empt the possibility of doubts on the stakeholders as well as the IIP. 

These included beefing up of the programme's ICT system, a revision of the IIP regulations, the setting up of an international network between authorities in different countries as well as only allowing the wealthiest applicant to be listed as the main applicant.

The regulator also proposed that in order to avoid allegations of collusion between the agency and the agents, the granting and revocation of licences should be assigned to an independent third party. 

He also urged authorities to shut a loophole which could technically allow people with a criminal record to apply for Maltese citizenship - although he stressed that the loophole had "never been invoked" and was only serving as fuel for detractors to claim "criminals are 'buying' Maltese passports". 

In a reaction, Julia Farrugia Portelli, parliamentary secretary responsible for citizenship, said she has ordered "an analysis of the recommendations" made in the report.

She did not say whether the law firm's licence had been reinstated but the agency still does not yet feature on the IIP website's agents list. 

PN reaction - report shows how Malta's reputation is being harmed

In a reaction, the Nationalist Party said the regulator's report confirmed how the sale of passports is harming Malta's reputation. 

The regulator had not denied anything revealed by the French journalists about a law firm having close links with the prime minister in what amounted to trading in influence.

The regulator urged authorities to shut a legal loophole.The regulator urged authorities to shut a legal loophole.

The report did not deny that the law firm had been given preferential treatment by the government, not least by being allowed to film its advertising material in the Office of the Prime Minister. 

The regulator had also not denied that many people who bought Maltese citizenship are facing serious criminal investigations including fraud, money laundering and tax evasion, belying government claims of strict due diligence before citizenship is granted.

The report showed how the law enacted by the Labour government made it possible for people with a criminal record to buy Maltese citizenship.

The PN said it was reiterating its appeal for the government to suspend the sale of citizenship, with immediate effect. 

MP Karol Aquilina signed the PN statement.  

Read the regulator's report in full by clicking on pdf below. 

 

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