The Government of Malta responded to the EU warning to check the citizenship programme for investment

October 22, 2020
Malta responded to the warning by the European Commission
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Malta responded to a warning by the European Commission accusing the country of “selling passports” and violating EU law. The government considers the criticism unfair but is willing to heed the recommendations to improve the programme.

The arguments in favour of a citizenship programme for investment are presented in an official press release from the Parliamentary Secretariat for Citizenship and Community Affairs.

What did the Maltese government respond to the EU criticisms?

The Government of Malta has submitted several theses on which it considers the criticism of the European Union unfounded.

The state has the right to decide for itself to whom and under what conditions to grant citizenship. The EU Government has no legal basis for intervention in these matters and acts outside its competence.

The Malta Citizenship Investment Programme will be restarted on new terms and conditions, taking into account the recommendations of the European Union. Under the new rules, the investor first draws up a residence permit for the country. You can apply for citizenship only after a year or 3 years in resident status. In this way, the investor will be able to confirm his or her intentions and connection with the country.

The Programme Department completed the acceptance of applications under the old conditions in August 2020 and is now in the process of completing processing. A restart of the programme was planned for September 2020, but in view of recent developments, it may be postponed indefinitely.

We talked about all the upcoming changes to the programme in the material “Restart of the Malta Citizenship Programme for Investment in September 2020”.

Obtaining Maltese citizenship for investment is only possible after thorough due diligence. Malta’s Due Diligence procedure is one of the strictest in the world. As part of the new programme, it will be strengthened to ensure that no breaches are likely to occur.

The Department has approved around 1,460 applications during the whole period of the citizenship programme. At the same time, it rejected about 500 applications – almost 25% of investors did not pass the due diligence.

The Government of Malta also noted that the European Union countries issue around 600,000 new naturalisation passports each year. In most cases, there is no thorough screening of candidates.

The Government of Malta will continue to publish the names of new citizens in a government newspaper. The Gazette will also publish the names of persons who will be stripped of their citizenship in Malta.

Malta directs foreign investment from its citizenship programme to developing and sustaining its economy. Funds from the programme have been used to implement social construction projects and to purchase medical equipment and hospital facilities.

The programme also supported the country’s economy during the COVID-19 pandemic, thanks to which the government was able to save jobs and lives for citizens and residents of the island.

In this regard, the Government of Malta believes that the closure of the citizenship investment program is contrary to the interests of the state.

Opinion of the European Commission on Malta's citizenship programme

The European Commission issued an official warning to the Government of Malta. By doing so, it began the procedure for investigating violations.

The European Commission believes that issuing a passport for investment, without any confirmed connection with the country, is contrary to trusting cooperation. They are established by Article 4 (3) of the Agreement on European Union.

Investment citizenship programmes are also alleged to undermine the integrity of the EU citizen status provided for in Article 20 of the Agreement. In case of violations of the terms of the programme, citizenship may be granted to persons who are involved in financial and other crimes. This means that they will be able to live, work, conduct business and vote in any EU country, which will have a negative impact on all countries in the region.

The full text of the warning is published on the official website of the European Union Government.

The Government of Malta will respond to the warning with an official letter within the prescribed 2 months. If the European Commission finds the reply unsatisfactory, it will have the right to make a reasoned conclusion on the matter and continue the investigation.

We also elaborated on this in the material “The European Commission will check the investment programme for Maltese citizenship for compliance with EU law”.

Autor: Наталья Анищук

The information contained in this news release has been prepared for general guidance on the topics discussed, is for information purposes only, and under no circumstances constitutes a public offer as defined by the provisions of Art. 2 of Article 437 of the Civil Code of the Russian Federation. All citations contained in this article are solely for informational purposes to the extent justified for a citation under Article 1274 of the Civil Code of the Russian Federation.

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