EU pressures Malta over Bank of Valletta 'golden passport' clients




  • In Business
  • 2019-12-03 09:05:41Z
  • By Reuters

By Francesco Guarascio

BRUSSELS (Reuters) - The European Commission has asked Malta to clarify how it intends to address Bank of Valletta's shortcomings over its monitoring of foreign customers who applied to buy Maltese citizenship under a so-called "golden passport" scheme.

Malta, with a population of only 420,000, has sought to attract foreign capital with schemes such as the cash for passport programme, even though the EU has highlighted the risks of this potentially attracting the proceeds of criminal activities. Under the scheme, people can obtain a Maltese passport by investing in the country.

Last month, Reuters reported on a confidential decision by the European Central Bank that required Malta's largest bank to take remedial action after an inspection exposed "severe shortcomings" that could have allowed money laundering or other criminal activities.

The ECB report said when foreign nationals seeking to buy passports under the scheme opened an account at Bank of Valletta (BoV), the bank registered them as Maltese citizens, which reduced their risk profile.

"The bank is currently engaged in a transformation and de-risking exercise in constant liaison with local and international regulators. We are confident that good progress continues to be made as part of this concerted programme," a spokesman for BoV said.

In the letter sent to Maltese authorities on Friday, and seen by Reuters, the Commission's director-general for justice Tiina Astola asked whether the government had acted on the ECB findings.

"Is there any specific follow-up given by the Maltese government to those parts of the report of the European Central Bank that concern the Individual Investor Programme?," she said referring to the passport scheme. She asked for a response by Jan. 6.

In the letter, Astola said these schemes posed a number of risks, including money laundering, corruption and tax evasion.

Malta's Prime Minister Joseph Muscat, who on Sunday said he planned to step down amid a crisis over an investigation into a murdered journalist, created the passport-for-sale scheme in 2014.

A spokesmen for Muscat was not immediately available for comment.

Under the passport programme, foreign applicants must invest at least 1 million euros ($1.1 million) in Malta to obtain a passport that allows the holder to work and live in most EU countries.

Among EU countries only Malta, Cyprus and Bulgaria grant citizenship in exchange for investment - the so-called "golden passports." Bulgaria said in January it would halt this programme.


CYPRUS

The Commission also sent a letter to Cyprus on Friday seeking clarification of a government decision in November to revoke the Cypriot citizenship of 26 individuals who were granted it under the country's investor scheme..

A Cyprus government spokesman was not immediately available for comment.

In the letter, seen by Reuters, Astola asked Nicosia whether it would investigate "possible misconduct" in these cases and how it intended to prevent people with high-risk profiles from getting passports in the future. Astola's letter asked for a response by Jan. 6.


(Reporting by Francesco Guarascio in Brussels @fraguarascio; additional reporting by Michele Kambas in Nicosia. Editing by Jane Merriman and Susan Fenton)

COMMENTS

More Related News

Novartis (NVS) Gets Approval for MS Drug Mayzent in Europe
Novartis (NVS) Gets Approval for MS Drug Mayzent in Europe

Novartis' (NVS) MS drug, Mayzent, obtains approval in Europe for the treatment of adult patients with secondary progressive multiple sclerosis.

Climate-Neutral Goal in Europe Heads for Government Vote in June
Climate-Neutral Goal in Europe Heads for Government Vote in June

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The European Union's goal to become the first climate-neutral continent is headed for a major test in June, when national governments may be asked to vote on a law that would make binding the remit set out in the Green Deal.Croatia, which is chairing meetings of the EU member states in the first half of 2020, wants to discuss the details of the planned law in the coming months and seek a common stance before its presidency ends, according to the country's Environment and Energy Minister Tomislav Coric. The law is currently being drafted by the European Commission, the EU's...

Britain wants friendly relationship with EU in the future: UK PM
Britain wants friendly relationship with EU in the future: UK PM's spokesman

Britain wants a future relationship with the European Union to be based on friendly cooperation, the prime minister's spokesman said on Tuesday when asked about a report suggesting London could be fined if it breaks the terms of a trade deal. Earlier, the Financial Times said plans presented by the European Commission on Monday suggested that Britain could be fined or lose preferential access to the European market if it violated the terms of a future relationship deal.

ECB lending rules must cover climate risk, Villeroy says
ECB lending rules must cover climate risk, Villeroy says

The European Central Bank should build climate risk into its lending rules and economic models rather than just gobble up green bonds in its multi-trillion-euro purchase scheme, French central bank Governor Francois Villeroy de Galhau said on Monday. ECB President Christine Lagarde will begin a one-year review of the ECB's policy framework this week.

Police detain 185 climate protesters at Brussels Motor Show
Police detain 185 climate protesters at Brussels Motor Show

Police detained 185 protesters in central Brussels on Saturday after the environmental protest group Extinction Rebellion staged demonstrations at The Brussels Motor Show in protest at the auto industry's role in CO2 emissions that cause climate change. The protest came only days after the European Commission unveiled ideas on how to finance its flagship Green Deal project that aims to make the European Union a CO2 emissions-neutral area by 2050, in part through the transformation of the car industry.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business