As golden passport schemes come under fire, Malta wins 1st place in Global Citizenship Program Index

As golden passport programmes are under heavy fire, Henley & Partners said that Malta secured 1st place in the Global Citizenship Program Index for the seventh consecutive year.

“The top three places in the Global Citizenship Program Index are occupied by European programs. Malta holds the 1st place, with its Granting of Citizenship for Exceptional Services by Direct Investment Regulations seeing the country score 77 out of 100. The regulations allow for the granting of citizenship following a 36-month residency period or by exception a 12-month residency period. In 2nd place is Austria’s citizenship by investment option, with a score of 74, while the highly sought-after Montenegro Citizenship by Investment Program ranks 3rd with a score of 72,” Henley and Partners writes in a press release.

Malta recently suspended its citizenship scheme for Russian and Belarussian nationals. The reason the Parliamentary Secretariat for Citizenship gave was that “as a result of recent developments, the existent due diligence checks cannot be carried out effectively in the current scenario.” However, the government was under pressure to suspend or ban the sale of citizenship to Russians prior to that.

But the idea of golden passports has been in the international spotlight for quite a while, with growing calls to ban such practice altogether.

In February, The Committee on Civil Liberties, Justice and Home Affairs approved a draft text with 61 votes for, 3 against, and 5 abstentions, setting out an array of measures to address problems linked to ‘citizenship and residence by investment schemes’.

The MEPs were calling for a ban on ‘golden passports’ and EU rules for ‘golden visas’

The MEPs stress that ‘citizenship by investment’ (CBI) schemes, under which third country nationals can get nationality rights in exchange for an investment, are “objectionable from an ethical, legal and economic point of view, and pose several serious security risks”. So-called ‘golden passports’ undermine the essence of EU citizenship and should be phased out, they insist.  The text calls for “a meaningful percentage” to be levied on the investments made, which would continue while the CBI is phased out, and indefinitely for ‘residence by investment’ (RBI) schemes, the so-called ‘golden visas’.

Rules for ‘golden visas’

The draft also deals with ‘residence by investment’ schemes – that give foreigners residence rights in exchange for a financial contribution. The draft report asks for common EU rules to harmonise standards and strengthen the fight against money laundering, corruption, and tax evasion.

Among other things, MEPs demand, stringent background checks (including on family members and on sources of funds), mandatory checks against EU justice and home affairs systems, and vetting procedures in third countries.

The Plenary is expected to vote on the draft tomorrow. If endorsed by plenary, the Commission will need to prepare a legislative proposal or justify its decision not to do so. This newsroom is informed that there is widespread support in favour of the draft by MEPs.