ANTI CORRUPTION

EU Citizenship: On Sale Now

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In the mar­ket for cit­i­zen­ship in the European Union (EU)? It’s now up for sale at a mere US$877,000.

According to Eurasia Review, the Maltese par­lia­ment passed a bill this week which offers cit­i­zen­ship to “ultra-high net worth indi­vid­u­als and fam­i­lies world­wide” who can pay the afore­men­tioned sum. Spouses and chil­dren of suc­cess­ful can­di­dates will be charged US$33,700 for cit­i­zen­ship. 

Malta’s new Individual Investor Program (IIP) hopes to bring in over US$400 mil­lion a year to the coun­try, attract­ing investors and high spenders to the small group of islands locat­ed between North Africa and Europe, reports the EUObserver.com. Henley & Partners, a cit­i­zen­ship and res­i­dence plan­ning firm, says that a dili­gent vet­ting process will ensure “only high­ly respectable clients will be admit­ted” as new cit­i­zens of Malta—and there­fore, by exten­sion, of the EU.

Defining “Exceptional”

According to Jelena Džankić of the University of Edinburgh’s Europeanisation of Citizenship in the Successor States of the Former Yugoslavia (CITSEE) project, a num­ber of coun­tries have unique pro­vi­sions for the nat­u­ral­iza­tion of “excep­tion­al” for­eign nation­als.

A coun­try may waive cus­tom­ary cit­i­zen­ship cri­te­ria such as res­i­den­cy and knowl­edge of lan­guage and cul­ture for these indi­vid­u­als, and may not require them to renounce their cit­i­zen­ship of ori­gin. Though rarely used, these pro­grams aim to “reward those indi­vid­u­als who have de fac­to made a sig­nif­i­cant con­tri­bu­tion” to a country’s econ­o­my, sports, sci­ences, or cul­ture, says Džankić.

Investor cit­i­zen­ship” makes this expe­dit­ed cit­i­zen­ship option more acces­si­ble, name­ly because it opens up the def­i­n­i­tion of an “excep­tion­al” indi­vid­ual to include one who is able and will­ing to pay sig­nif­i­cant sums of mon­ey for cit­i­zen­ship.

Malta is not the first coun­try in the world, or even in the EU, to sell cit­i­zen­ship.

Austria offers cit­i­zen­ship for US$10 mil­lion. St. Kitts and Nevis presents the “most attrac­tive cit­i­zen­ship-by-invest­ment pro­gram avail­able today,” requir­ing a US$250,000 con­tri­bu­tion to the country’s Sugar Industry Diversification Foundation or a US$400,000 invest­ment in real estate, reports CNN.The Caribbean island of Dominica extends cit­i­zen­ship pend­ing a US$100,000 invest­ment.

Crime, Corruption, and other Caveats

One con­cern voiced around Malta’s IIP is that it may offer not only an expe­dit­ed path to cit­i­zen­ship, but also to cor­rup­tion. The law has been met with sharp crit­i­cism from nation­al­ist groups as well as those who fear it would encour­age and lubri­cate orga­nized crime, mon­ey laun­der­ing, and ter­ror­ist activ­i­ties.

Roberta Metsola, a Member of the European Parliament rep­re­sent­ing Malta, said that since the draft law does not man­date dis­clo­sure of the iden­ti­ties of new cit­i­zens, it “cre­ates a con­cept of hun­dreds of ‘secret cit­i­zens’ which will lead to a dif­fer­ent lev­el of cit­i­zen­ship in Malta and the European Union,” reports the Malta Independent.

The Malta Employers’ Association has com­plained that the pro­gram lacks trans­paren­cy and tar­nish­es Malta’s pub­lic image. The Employers’ Association said that any income from the IIP would be “dras­ti­cal­ly out­weighed by the neg­a­tive fall­out in our rep­utable and sen­si­tive finan­cial ser­vices sec­tor. ”

Historical Precedents

According to the EUObserver.com, the “cit­i­zen­ship by invest­ment” pro­gram has attract­ed ques­tion­able investors in the past.

In 2007, Cyprus said it would pro­vide cit­i­zen­ship to for­eign­ers who had no crim­i­nal record, deposit­ed more than $US22 mil­lion in a Cypriot bank, and lived and did busi­ness on the island. Five years lat­er, Cyprus revoked the cit­i­zen­ship of one of the can­di­dates who orig­i­nal­ly met these require­ments: Rami Makhlouf, the cousin of Syrian President Bashar al-Assad. Makhlouf lost his cit­i­zen­ship after he was black­list­ed by the EU for “bankrolling Assad’s mas­sacres,” reports the EUObserver.com.

In Austria, Freedom Party politi­cian Uwe Scheuch alleged­ly promised to help a Russian investor gain cit­i­zen­ship. In return, the Russian investor was required to pay US$6.7 mil­lion to the Austrian state of Carinthia, and “donate” 5 to 10 per­cent of the funds to Scheuch’s par­ty. According to Džankić, Scheuch was sen­tenced 18 months in prison for this deal.

Finally, in 2009 Montenegrin offi­cials grant­ed cit­i­zen­ship to the for­mer Prime Minister of Thailand, Thaksin Shinawatra, for his planned mul­ti­mil­lion-dol­lar invest­ment in Montenegro’s tourism indus­try. Thaksin, mean­while, had been con­vict­ed of cor­rup­tion in his home coun­try, reports Džankić.

Consequence for the EU and Beyond

According to CITSEE, one of the main com­plaints against investor cit­i­zen­ship is that it is loose­ly reg­u­lat­ed. The state has wide dis­cre­tionary pow­er over whom it pro­vides cit­i­zen­ship to, and often does not release the names of the new­ly nat­u­ral­ized, thus open­ing up pos­si­bil­i­ties for tax eva­sion and cor­rup­tion and com­pli­cat­ing any poten­tial extra­di­tion process­es.

This has notable ram­i­fi­ca­tions for the EU. An accept­ed can­di­date in Malta’s IIP pro­gram is giv­en the right to vote, move about and reside freely in, run for office, and seek diplo­mat­ic and con­sular sup­port not only in Malta, but also in any EU mem­ber state.

According to European Commission spokesper­son Michele Cercone, mem­ber states of the EU “have full sov­er­eign­ty to decide to whom and how they grant their nation­al­i­ty,” reports EUobserver.com. This sig­nals that the European Commission, which is charged with ensur­ing that EU law is cor­rect­ly applied, can­not and will not seek to mod­i­fy or over­rule Malta’s new man­date.

According to Malta’s EU page, the islands were first named “Malat,” mean­ing “safe haven.” The ques­tion now is, for whom, for what, and at what price?

By Ana Baric

EU Citizenship: On Sale Now

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