Pandemic deals blow to golden passport applications

The regulator for Malta’s citizenship-by-investment programme, formerly the Individual Investor Programme (IIP), said applications for the golden passport had been on a downward trend before the pandemic.

“The months-long closure of Malta’s International Airport and Seaport for passenger traffic, as well as other airports and seaports world-wide, likewise affecting passenger traffic, practically brought the finalisation of applications to a standstill and the granting of citizenship to many of the successful applicants postponed sine die,” the ORGCES (Office of the Regulator for the Grant of Citizenship for Exceptional Services) said.

In the report covering July 2019 to December 2020, the regulator complained about the heavy criticism towards the IIP by national and international institutions who “to date failed to get in touch with my office to witness how we meticulously scrutinise to the minutest detail the work performed by the Malta Individual Investor Programme Agency.”

340 applications were processed by the regulator, a watchdog that scrutinises the operations of the Community Malta agency, which had a 60% success rate. 101 applications were refused while 32 were withdrawn, either due to a request by the applicant or due to inactivity.

For 2020 alone, the (former) IIP agency received 317 applications. September saw the highest number of applications passing through the agency, with 56 individual applications. December was the slowest month with only 11 submitted application.

Since 2015, the agency has received 2,222 applications. The highest number of applications received in a year was 484 in 2015. The lowest number recorded was in 2018, with 286 applications.

Applicants are predominantly male, with 75% of the applications representing a male main applicant. Only 25% had female main applicants.

Over half of applicants come from Europe and Asia. In 2020 European applicants made up 36% of all applications, while Asian applicants comprised 37% of the pool.

Applications from the Middle East and Gulf region have fallen drastically over the years. In 2015 applicants from this region comprised 20% of the total requests. By 2020 they make up only 6% of applicants – the fourth lowest before South America (2%), Oceania (0.5%) and the Caribbean (0%).

For 92.7% of applicants, their Maltese passport would have been their second source of citizenship after that of their birth country. Meanwhile 7% of applicants already had two previous citizenships when applying, while 0.3% had three previous citizenships.

In 2020 the majority of rejected or withdrawn applications came from Asia, with 40 total applications. This was followed by 33 rejected applications from Europe. The rest of the applications hailed from Africa (9), North America (8), Middle East and Gulf (11) and one each from South America and the Caribbean.

There are 62 different agents that process applications presented to the agency, but over half of the applications were submitted by only four agents. The remaining 48% were distributed among 58 agents, of which 27 only submitted one application during the 18-month covering period.

One of the main obligations of IIP applicants is to purchase or lease a property in Malta. The property must have a minimum value of €350,000, or if leased, must have a minimum annual rent of €16,000. 94% of applicants chose to rent property – often-times in Sliema or St Julian’s. On average, the annual rent paid by applicants was €18,591.

Another obligation by applicants is to contribute to the National Development and Social Fund, among a raft of other donations and investments. For July 2019 and December 2020 applicants contributed €86 million to the NDSF and €107 million to the Consolidated Fund. Another €10 million were distributed to Community Malta, and almost €9 million was handed to the programme’s concessionaire Henley & Partners.

Most applicants held back on their civil society donations, but some proved to be very generous. The University of Malta’s maths department received €108,000 across just two donations. Dar tal-Providenza received €159,800 across 32 donations.

The Puttinu Cares children’s care charity received the most donations, raking in €1.3 million from 210 donations. The Malta Community Chest Fund received €1.1 million across 158 donations.

Scandal investigations

In 2019, the law firm Chetcuti Cauchi Advocates was secretly recorded by a French TV news programme allegedly boasting of his friendly relations with the prime minister and parliamentary secretary for citizenship in a pitch to sell Maltese passports to potential African clients.

The footage had been heavily edited, as was revealed after the company obtained the raw footage in a French privacy watchdog request.

The regulator investigated the allegations through a series of vetting sessions, saying no red flags were uncovered to support the story. “No records were found of applicants having a criminal record or of 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 for that matter) nor was there any indication that the agent had ever received preferential treatment.”

The regulator simply put forward recommendations to government to improve the citizenship process.

In July 2020 Opposition MP Karol Aquilina alleged that 58 applicants were granted citizenship without providing their birth certificate. The regulator investigated, and found that birth certificates may not be available in around 16% of countries, in which case the agency would request other official documentation.