Malta’s Citizenship Scheme Under Scrutiny Amid EU Sanctions
In recent developments, the European Union has imposed sanctions on Russian businessman Albert Avdolyan due to his connections to the ongoing conflict in Ukraine. Despite these sanctions, Avdolyan has managed to partially bypass travel restrictions by utilizing a Maltese passport he acquired through the controversial citizenship-by-investment program, also known as the “golden passport” scheme.
Background on Citizenship by Investment
Avdolyan, who obtained Maltese citizenship in 2015, is among seven individuals who have gained citizenship through this program and later faced sanctions from the EU, the US, or Ukraine. A report from the Financial Times highlights that these individuals are part of a broader group of 16 who were able to acquire Maltese citizenship despite being classified as politically exposed persons or subsequently appearing on sanctions lists.
Malta remains the last EU country that still permits the purchase of citizenship. This has raised significant concerns within the European Commission, which has initiated legal action against Malta in the European Court of Justice, aiming to dissolve the scheme. The Commission contends that such programs “undermine both the essence and the integrity of EU citizenship.” A ruling on this matter is anticipated soon.
Controversies Surrounding the Scheme
Investor citizenship programs have faced increasing scrutiny across Europe and beyond, criticized for potential abuses and for facilitating access to countries by wealthy individuals with questionable backgrounds. For instance, when the UK ended its golden visa program, officials cited it had enabled corrupt elites to enter the country.
Eka Rostomashvili from Transparency International remarked, “It’s an insurance policy for some, it is an exit strategy for others… these schemes are very problematic.” She pointed out a trend whereby individuals apply for citizenship shortly before they are sanctioned or implicated in scandals.
Case Studies Among Maltese Passport Holders
Individuals like Evgeniya Vladimirovna Bernova, sanctioned by the US for allegedly facilitating the export of dual-use technology for military ends, showcase the potential risks. Bernova claims her acquisition of Maltese citizenship followed stringent due diligence and insists she has meaningful ties to Malta.
Moreover, other passport holders include members of the Saudi royal family and individuals who have navigated complex legal situations related to their citizenship status. One notable case involves Pavel Melnikov, who received both Maltese and St Kitts and Nevis passports and is currently appealing tax fraud convictions in Finland.
The Maltese program requires significant investment: a minimum contribution of €600,000, alongside property acquisition or rental and charitable donations. Notably, Avdolyan himself cited the practicality of a Maltese passport for his business travels and familial connections, as his entire immediate family also holds Maltese citizenship.
Impact of Sanctions and Further Implications
Despite being sanctioned in February for allegedly generating considerable revenue for the Russian government, Avdolyan can still travel to Malta. His links to major Russian state enterprises further complicate the narrative surrounding the efficacy and integrity of the Maltese citizenship scheme.
While Malta asserts that it has enhanced diligence measures and prohibited applications from Russian and Belarusian citizens in light of current geopolitical tensions, criticisms persist that these reforms may not be sufficient to prevent misuse of the program.
Future Considerations
As the European Court of Justice prepares to consider Malta’s citizenship scheme, the decision could set a precedent for similar programs across Europe. Experts caution that a ruling favoring Malta might embolden other nations to pursue comparable citizenship sales, potentially leading to a “race to the bottom” in regulatory standards.
Many advocates for tightening these programs believe that merely enhancing the due diligence process is insufficient, arguing that the inherent nature of citizenship-for-sale models attracts individuals with problematic histories.
The scrutiny of Malta’s golden passport scheme forms part of a larger conversation about the integrity of citizenship within the EU. As consumer and political pressures mount against such systems, the future of these programs will likely be challenged on ethical, legal, and operational grounds.
Ultimately, the reverberations of this case and others like it could initiate significant changes in how citizenship is regulated, with ramifications that extend beyond Malta to affect standard practices throughout Europe.