Privacy watchdog says disclosing IIP data could damage passport sale

Malta’s commissioner for information and data protection has upheld a refusal by Identity Malta not to release detailed statistics on the agents of Malta’s sale of passports to the global rich.

Statistics into Malta’s sale of citizenship for €650,000 continue to be shrouded in secrecy because of the authorities’ willingness to safeguard commercial information for the agents of the Individual Investor Programme.

The IDPC upheld a refusal by Identity Malta not to release how many applicants were promoted for the IIP by each agent, and how many of these applicants were successful in acquiring Maltese passports.

There are 171 agents selling Maltese citizenship, apart from concessionaire Henley & Partners, which devised the programme. They include Big Four accountancy firms as well as other mid-tier corporate services providers, and legal firms led by partners with political allegiances from both sides of the Maltese political divide.

MaltaToday requested a full breakdown of the successful applicants, and how many dependants were attached to the individual applicants.

The sale of Maltese citizenship originally came capped with a limit of 1,800 main applicants, but the government is now preparing to extend the scheme, which is billed as having generated over €590 million in direct payments to the State, €360 million of which are deposited in a posterity fund.

Identity Malta originally refused MaltaToday’s request claiming that the data was “confidential commercial information” that would have adverse effects on the financial interests of the government if disclosed.

MaltaToday submitted that Identity Malta had not proved how the data’s disclosure could outweigh the public interest served by disclosure, when it was clear that Identity Malta was already furnishing data on nationalities, property purchases and receipts to the IIP regulator.

Following a complaint to the IDPC, Identity Malta insisted that the “volume of business of accredited agents is not at all the concern of Identity Malta. Accredited agents do not deal with Identity Malta in the knowledge that Identity Malta will be revealing the volume of their business.”

It also said it had no legal obligation to make the information public.

In its decision, the IDPC said that revealing the number of successful applications by IIP agents reflected “a level of commercial activity… which if disclosed may encroach on the rights and understanding of the agent or concessionaire to maintain commercial confidentiality.”

The IDPC said Identity Malta had a public interest in ensuring that no accredited agent is “in any way hindered in his service with any potential investors.”

The IDPC also said that publishing the information requested would “cause disruption ultimately to the working of the IIP scheme. Indeed, such information may direct clients away from agents who in terms of the information revealed would not have a considerable volume of IIP-related work.”

Other refusals

Identity Malta has already turned down a Freedom of Information request to give MaltaToday the list of citizens who acquired a passport through the IIP.

Identity Malta turned down MaltaToday’s freedom of information request, saying that the information requested was already publicly available.

“Identity Malta Agency cannot discriminate between citizens of Malta as requested by the applicant.”

MaltaToday filed a complaint, arguing that citizenship laws do not directly prohibit the separate publication of a list of ‘IIP citizens’ and that this was only a matter of policy.

“The IIP itself is a scheme built on discrimination… it discriminates between future citizens who can acquire citizenship through naturalisation or by acquiring registration through the IIP. Identity Malta is itself promoting a discriminatory route to Maltese citizenship; arguing that a separate list would discriminate between IIP and non-IIP citizens, is a smokescreen,” MaltaToday said in its complaint to the agency. “The ‘discrimination’ is essential and has a public interest because the investment of so called ‘IIP citizens’ is directly linked to the reputation of the country and its economic growth.”

But Identity Malta also refused this complaint, saying that citizenship rules mandated the sole publication of a single list of all persons. “Publishing lists of sub-categories of new citizens by reference to the method of acquisition of citizenship would violate the principle that all citizens are equal and have a right to be treated equally by the State,” Identity Malta said.

IDM also insisted that all citizens were equal after having acquired citizenship, and that the discrimination in the acquisition of citizenship was no longer relevant at that point.

“The request refers to the post-acquisition stage and the method of acquisition (except for the fact of falling into the categories of citizenship by registration on naturalisation) is therefore no longer relevant at that stage.”

MaltaToday will be appealing the refusal with the Information and Data Protection Commissioner.

Malta’s IIP sells citizenship to the global elite for €650,000 a passport. Applicants must also commit to acquire a property worth €350,000 or rent an apartment for five years for at least €16,000 per annum, and invest €150,000 in government stocks.

In 2016, a MaltaToday story on the residential properties of successful IIP citizens not being worth €350,000, led to the creation of a compliance unit at Identity Malta to investigate potential abuses.

In an investigation carried out by the regulator of the IIP, it turned out that in the 13 cases selected by MaltaToday, 11 had leased their premises and in six of these cases the lease value was “nearly equal to the threshold” save for a €200 difference.

The regulator said this statistic implied the figure had been rounded upwards so that the rental would be in line with the IIP rules, or that the applicants had specifically selected a property that did not significantly exceed the minimum €16,000 threshold.

Identity Malta started to request accredited agents to provide a qualified architect’s declaration to confirm the values of the properties being leased and purchased; and has set up a Compliance Unit tasked with monitoring and investigating potential abuses.