Department rejects ‘dirty money’ suggestions made in UK inquiry
The Home Office has hit back at suggestions that Malta’s passport system may be accepting money from “suspicious people” in Asia to make up for lost business from Russia.
A former UK government adviser has raised concerns about the scheme in submissions to the UK Foreign Affairs Committee, which is investigating global flows of dirty money.
In written submissions to the committee, Shanker Singham warned that Malta’s efforts to fill the financial void left by passport sales to Russians could see it turn to equally dubious sources of passport money from China and from Central Asia.
Malta suspended the sale of passports to wealthy Russians in response to the country’s invasion of Ukraine.
However, a Home Office spokesperson insisted the relevant authorities have always carried out “full due diligence checks” which are, by standard, one of the most robust in the world.
Local and international databases are searched during the process, with all requests also being referred to world-renowned due diligence service providers, the ministry spokesperson said.
These service providers carry out checks on the ground and applications are refused if the applicant is found to be at risk, he added.
“Chinese and Asian nationals already have the option of applying for citizenship by investment. Applications from questionable persons are refused, regardless of the nationality of the applicant,” the spokesperson said.
So far, the government has pushed back against requests from the European Commission to halt the program because of the risks of corruption, money laundering and tax crime it poses for the whole of the EU.
Singham, once an adviser to former Secretary of State Liam Fox, explained in his memoir to the committee how Malta has historically been used as a site for Russian funds as well as “the European visa of choice” for Russian oligarchs .
“Cyprus has long been a target for Russian oligarch funds, but it seems the Kremlin is turning its attention to Malta,” Singham said.
He stressed that it is “very likely” that Malta’s decision to reject a so-called status of forces agreement with the United States was achieved because of Russian and Chinese pressure for Malta to maintain its neutrality.
No other evidence was provided by Singham to support this claim.
The United States has signed such agreements with several other countries, intended to cover military cooperation or visits by military forces, which in the case of Malta would be ship visits.
Singham also warned that failure to meet basic requirements of good governance and the rule of law could lead to a further setback in Malta’s fight against financial crime.
Failure to do so could see the country attract illicit, rather than licit, money flows.
“Malta must choose: there is no space between a legal node and an illegal node,” says Singham.
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