Italian MEP wants EC to investigate Malta residence permit racket

An MEP from Silvio Berlusconi’s Forza Italia party has demanded an investigation from the European Commission into the sale of Maltese citizenship under the Individual Investor Programme, due to the police investigation into the racket of residence permits issued to Libyan nationals.

Lara Comi’s questions to the EC have so far not yet been answered, but the MEP reported the “mass fraud” of residence permits granted to Libyans with companies having false stock, in the racket allegedly orchestrated by auditor Joe Sammut.

Comi made specific reference to Sammut as being “in collusion with the party in government” – Sammut happens to be a former treasurer of the PL.

“This situation has raised Maltese people’s concerns over security,” Comi said.

She asked the EC to investigate and verify the information on the residence permit racket, and to identity whether there are security shortcomings that could affect the sale of Maltese passports under the IIP.

Malta sells passports for €650,000, together with a property and investment addition of €400,000, under the IIP.

In March 2014, the EC said that Malta gad addressed concerns raised by the European Commission on its citizenship sale by introducing the requirement of a ‘genuine link’ with the country through “an effective residence requirement” of at least 12 months, as a pre-condition for obtaining citizenship.

But more recently, the IIP regulator said that an initial contribution of €650,000, a property lease or purchase agreement and the holding of a maximum investment – among other obligations – were enough to prove an applicant’s residency in Malta, the Regulator of the Individual Investor Programme has confirmed.

This means that physical presence is not required to prove residency – although any aspiration to mirror physical stay to the 182 days applicable for taxation purposes “should be accepted as a non-starter”.

After Identity Malta sought the advice of Professor Dimitry Kochenov – who holds a Chair of EU Constitutional Law at the Department of European and Economic Law at the University of Groningen in the Netherlands – the Office of the Regulator concluded that IIP applicants could prove their residency by other means, and the physical presence or otherwise of the applicant should no longer be an issue.

According to Kochenov, residence in a EU Member State is a legal status and it therefore does not carry the same meaning as presence.  “Being a legal status, residence comes with rights and obligations and the conditions of its commencement and termination depend on the rules in force and not on the presence of a particular individual within that territory.”