Prime Minister contractually bound to promote IIP passport sale

THE concessionaries of Malta’s sale of passports, Henley & Partners, oblige the Maltese government to provide its top brass to promote the Individual Investor Programme – the sale of Maltese citizenship at €650,000.

The government’s contract with citizenship specialists Henley was tabled last Wednesday in parliament at the start of a Public Accounts Committee meeting to discuss the IIP concession.

It is through this contract that Prime Minister Joseph Muscat has been bound to promote the IIP at Henley’s regular roadshows around the world.

As stated in Article 7.4, it is at the concessionaire’s own discretion that from time to time it organises, at its own cost and expense, conferences and events to professionally promote the IIP worldwide.

“The government will ensure to send, whenever requested by the concessionaire, appropriate high-ranking government representatives, or other senior government officials, to speak at the events and represent the Programme and the government.

“The government shall also use reasonable endeavours to arrange that one or several of its investment promotion agencies shall participate in those events as partner, sponsors, or by providing further specialised speaker of the event programmes.”

The contract was published with some sensitive clauses blacked out, 16 months after news of the IIP came out in November 2013. The Opposition has objected to the blacking out of the clauses.

Muscat has so far addressed audiences in London, New York, Miami and Singapore on Henley-sponsored conferences in which he advocated Malta’s citizenship sale as a way of “attracting talent”... as well as €650,000 in cold hard cash, an added €150,000 investment in financial instruments, and €350,000 in property or an annual €16,000 in rent over the course of five years.

The contract provides that Henley does not get directly reimbursed by the government but is paid 4% of the €650,000 from IIP applicants, while another 6% goes to the government agency Identity Malta, and the remaining 90% is paid into an independent investment vehicle, the National Social and Development Fund.

The government has resisted releasing the Henley contract since it was forced by the Opposition to introduce the added investment requirements on property and finance, removed Henley’s exclusivity on promoting the IIP, and also to negotiate a minimum 12-month residency requirement with the European Commission.

However, IIP regulator Godwin Grima has called on Identity Malta to provide clear guidelines of what is considered as admissible proof of residence in Malta.

“This is so that actual or potential applicants will know up-front the onus upon them to prove their residence requirements in Malta,” Grima said.

On 29 January, 2014, the European Commission announced that a minimum 12-month residence preceding the day of issuing the naturalisation certificate was necessary for Malta to go ahead with the IIP.

But it has remained unclear whether an IIP applicant has to establish himself physically on the island at the time of applying for citizenship.

Grima has suggested in his report that proof of residence can be provided through a water and electricity bill, a bank statement, a telephone, mobile or television statement.

There are currently 85 accredited agents, apart from Henley & Partners, promoting the IIP internationally.

459 applications have been submitted for residence permits, as part of the IIP requirement. According to the analysis carried out by the Office of the Regulator, 59% of all IIP applicants came from former Soviet republics; 30% from the Asian continent and 3.5% from the African continent – 18% derived from Middle East countries whilst 9.8% hailed from the Gulf.

Applications from BRICS countries – Brazil, Russia, India, China and South Africa – represented 61.3% of total applications.

Capped at 1,800 applications, the IIP is expected to reap €1 billion each year over the course of the next three years with 600 applicants annually.