Malta considers expanding controversial cash-for-passport programme

Project has raised millions for the government but has been criticised by the EU amid corruption claims

Candles burn to commemorate the killed investigative journalist Daphne Caruana Galizia in Berlin, Germany, October 20, 2017. REUTERS/Axel Schmidt

The Maltese government is considering expanding a controversial passports-for-sale scheme that was the target of investigation by a high-profile journalist before her murder on the Mediterranean island last year.

The scheme that opens up citizenship to oligarchs from Russia and the Middle East has been criticised by the European Union lawmakers because of concerns it would turn the country into a money-laundering centre.

The project was a target of Daphne Caruana Galizia, an outspoken journalist murdered when her car was bombed in October 2017. She had claimed that politicians were involved in kickbacks from the scheme, allegations denied by the government.

Under the scheme, a non-EU citizen can secure a Maltese passport on terms including payment of 650,000 euros to a national fund, investments in property on the island and a year-long residency. Some 1,200 families have applied under the scheme, according to government figures.

Those who have taken advantage of the scheme include Christopher Chandler, the investor behind the London thinktank Legatum that has been one of the most vocal backers of Brexit, according to the FT.

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A list published in December of new Maltese citizens also included Russian billionaires and around 22 per cent of those who applied in the last recorded year were from the Gulf and Middle East regions, according to the programme’s regulator. The private company behind the scheme, Henley and Partners, has received more than 19 million euros from the scheme, according to the regulator.

The Maltese government said that it had received more than 590 million euros from the scheme since it began in 2014 when the numbers were capped at 1,800. It asked in the consultation whether the cap should be increased or the terms changed.

Maltese campaigners say the programme has increased the cost of housing on the island and released its own survey of the scheme as a riposte to the government.

Ana Gomes, a senior figure in the European parliament’s investigation into the Panama Papers, said that the scheme was a “system geared to fostering corruption.”