EU Slaps Down Malta's Golden Passport Program

Citizenship in EU countries cannot be sold

Image by Rudy and Peter Skitterians from Pixabay

The European Court of Justice—the EU’s top court—this week ordered Malta to shut down its “golden passport” program. These programs essentially allow wealthy individuals to purchase European citizenship if they invest enough money in the country where they’re applying. The citizenship, in turn, grants these individuals the privileges and rights afforded to EU citizens, including travel in the Schengen area and visa-free travel to the United States for 90 days or less under the Visa Waiver Program.

To make travel easier, you can travel visa-free, thanks to EU agreements. Citizens of most EU countries can travel to the US under the US Visa Waiver Programme (VWP). You only need US authorisation, which you can obtain through the Electronic System for Travel Authorization (ESTA) using a machine-readable passport. As an EU citizen, you are also exempt from Canadian visa requirements – to enter Canada, you only need a valid passport and an Electronic Travel Authorization (eTA), which is available online.

The ECJ rightly said that citizenship in the EU shouldn’t be for sale. Just because you’re wealthy, doesn’t mean you’re safe or connected to Europe by values and principles.

The program “amounts to the commercialization of the grant of the nationality of a member state and by extension that of union citizenship,” a judge at the court in Luxembourg said. “The acquisition of Union citizenship cannot result from a commercial transaction.”

But there’s no doubt that these “golden passport” programs are profitable. Malta has raked in more than $1.5 billion since 2015 through this scheme. And although Malta’s politicians claim the court’s decision is “politically motivated,” the screech of every corruptocrat when things don’t go their way, the risks are undeniable.

What are the risks?

These “golden passport” Citizenship/Residency by Investment (CBI/RBI) programs are prone to abuse, according to the Financial Action Task Force (FATF). The global money-laundering watchdog in November 2023 noted that these CBI/RBI programs allow benefits to those who can afford to purchase citizenship, such as enhanced freedom of movement, access to international financial sectors, and the opportunity to gain a new identity. However, these benefits come with risks, according to FATF.

Access to passports that provide greater freedom of movement, including expanded visa-free travel, easier access to visas, and potentially less scrutiny by immigration officials, especially where electronic reporting systems are not in place, can allow illicit actors to access jurisdictions from which they would normally be barred. These travel opportunities give potentially illicit actors access to the international financial system otherwise not available to them in their home jurisdiction or under their previous identity.

And speaking of previous identities…

I’ve written about money laundering and narrative laundering on this site. Now, let’s talk about identity laundering. FATF defines “identity laundering” as the “Opportunity to acquire a travel and identification document under a different nationality or name, which can be used to represent who the holder is in a novel way, or otherwise obfuscate the person’s original identity.”

In the CBI context, this can mean applicants could acquire a passport under a different name, or with information that is slightly different from their other identity documents, which may prevent database searches from identifying known derogatory information about that individual. Although some individuals may provide fraudulent identity documents, this is by no means necessary. In fact, there is no need for fraudulent activity to occur for a subject with criminal or national security concerns to change an identity via some CBI programmes in order to be able to travel freely and evade detection.

Since Russia’s full-scale invasion of Ukraine in 2022, corrupt and sanctioned Russians have been flocking to CBI/RBI programs to store their wealth. According to Transparency International, reportedly half of the issued passports in the EU have gone to Russians – including those like the sanctioned billionaire Oleg Deripaska. EU countries last year granted more than a half a million Schengen visas to Russians, allegedly for “tourism.”

• Portugal’s golden passport scheme last year saw an almost 50 percent increase in investments by Russian nationals. Portugal in 2022 suspended the program for Russians in response to its invasion of Ukraine, but the applications keep pouring in, and Portugal has quietly opened its doors to Russians and Belarussians again last year.

• Spain this year ended its golden visa program, which allowed citizens of countries outside the EU to invest from €500,000 in Spanish real estate without a mortgage and gain the right to live and work in the country for three years—plenty of time to move assets and get access to the global financial system.

• Latvia and Finland have both announced plans to restrict real estate purchases by Russian nationals in those countries. Real estate is a popular money laundering vehicle and a convenient means to invest and gain residency. Russians and Belarussians have both been banned from Latvia’s golden visa program - a real estate investment option that allows applicants to invest at least €250,000 in real estate in Latvia and gain EU access by holding on to the investment for at least five years.

And the sanctioned Russians aren’t the only threat.

Greece has also been handing out golden visas like candy, according to a Schengen news report this year. The news outlet reports that a total of 6,520 residency permits have been issued to Chinese nationals through the country’s golden visa program as of February 2025. Turkish and Lebanese nationals have also been beneficiaries of the scheme. Between March 2024 and March 2025, applications for the Greek golden visa program by Turkish nationals increased by 46 percent.

Putting on my counterterrorism hat, it’s not difficult to imagine potential terrorists with deep pockets gaining EU residency from high-risk jurisdictions in close proximity to hotbeds of terrorist activity and traveling to Schengen countries to wreak havoc.

Italy in November revoked citizenship of five individuals, mainly from Lebanon, who were found to have been linked to Hizballah. Note: these individuals didn’t obtain citizenship through a golden passport scheme, but they did fraudulently gain Italian citizenship and had access to the rest of Europe because of it.

Does anyone really want to give rich terrorists (here’s looking at you, HAMAS) freedom of movement in the EU, and possibly even the United States?

You know who did gain access to the EU via a golden passport scheme?

Former Afghan spymaster Asadullah Khalid, Cavit Çağlar—a Turkish millionaire convicted of fraud who served nine months in prison—and former Libyan colonel under Muammar Gaddafi, Sasi Milud Sasi Grada. All gained access through Dominica’s citizenship scheme, which was increasingly accessed by those seeking EU access after the Caribbean state was granted visa-free travel to the EU in 2015, according to media reporting from an investigation that involved the Organized Crime and Corruption Reporting Project (OCCRP).

The concerns about Dominica’s citizenship by investment program were so significant, that the UK in July 2023 stopped visa-free travel from Dominica and four other countries.

Mitigating Risks

So many risks, so few resources, right? Here are just some mitigation measures jurisdictions and organizations can take to detect and deter illicit actors from gaining citizenship or residency in the country and accessing the financial system.

Adequate vetting and screening of applicants who want to gain residency or citizenship in a given country are absolutely crucial. The problem is that these efforts are complicated by limited resources and evasive tactics.

According to FATF, governments generally check the information that applicants provide against criminal or national security databases, collect biometrics (such as fingerprints), and examine the applicant’s employment history and/or source of wealth.

But much like all other evasion tactics, methodologies to obscure identities, countries of origin, and sources of wealth have evolved. Applicants use complex ownership and control structures to obscure their involvement in various entities. They gift assets to their spouses, they change their names to evade scrutiny.

So enhanced due diligence is a must. List screening is a good start, but it’s insufficient.

Cross-checking and information-sharing among government agencies can go a long way in helping ensure that those gaining citizenship in a jurisdiction aren’t prohibited persons, illicit actors, or terrorists. Efficiently removing individuals and agents from participation in the CBI/RBI programs once they’re found to be risky or had illegally accessed the scheme can also help.

I’ve written about the importance of corroboration before. Corroboration of reporting is critical in due diligence efforts. Using multiple and independent due diligence providers to conduct due diligence on individuals seeking citizenship or residency is a good quality control feature. FATF recommends testing performance of providers by periodically duplicating checks to test the quality of due diligence service providers and to manage the risks of conflicts of interest.

I’ve often flagged the importance of jurisdictional, linguistic, and cultural expertise when conducting due diligence and enhanced due diligence research. Adverse media is also important as a springboard to deeper research.

Open-source screening to identify adverse information/news reporting is valuable, particularly when tools and capabilities are enabled to carry out searching against media in the language/languages of the jurisdiction of origin. Identifying indications of potential criminal activity from media is helpful when an individual may have cover from prosecution or where the necessary information from law enforcement cannot be obtained.

Links to politically exposed persons (PEPs), especially in jurisdictions that are high-risk for financial crimes and those in close proximity to said regions, should be closely examined. Screening systems should be updated based on evolving regulatory developments, and monitoring of risks should be standard.

FATF also recommends periodic review of medium and high-risk applicants (at least every three years).

In-person interviews by agencies involved in granting citizenship or residency should be standard to verify information and test the credibility of submitted documents, especially if adverse media reports indicate that greater scrutiny should be applied. Linguistic expertise can be useful here. The nuance and possible misinterpretation of the language can lead to possible illicit actors gaining access to citizenship or residency.

Let’s remember that once illicit actors establish citizenship or residency, they can create entirely domestic companies, trusts, or other arrangements, which may be less transparent, but because they become “local,” they become of the trusted financial ecosystem.

And these strategies can also be employed by financial institutions to ensure they’re not transacting with illicit actors should their application slip through the cracks.

Does the Malta ruling affect all of Europe?

Disclaimer: I’m not a lawyer.

That said, the ruling does not appear to ban golden visa programs or residency by investment programs, but only the sale of citizenship through investments. The golden visa programs still exist, and a number of European countries still have them. These programs seem to be increasingly popular. Residence permit applicants are paying up to €800 to middlemen just to get an appointment in France, according to Schengen news, and those who want citizenship are paying as much as €1,200 for intermediaries to help them with their naturalization process.

So the programs still exist, and still appear to present threats of illicit finance, such as money laundering, tax evasion, sanctions evasion, and others. Risk assessments, analyzing the ever-evolving threats and robust recordkeeping requirements should should be in place.

Will Malta rescind the golden passports it may have issued to illicit actors? One would hope, but a top-down review must be conducted into who has gained citizenship. What about the separate “golden visa” program that grants Maltese residency to wealthy foreigners? Will that be scrapped? Probably not. Maybe it will be curtailed slightly, but the risks still exist.