Rich Russians needing an exit strategy turn to Malta, where citizenship is for sale

Rich Russians needing an exit strategy turn to Malta, where citizenship is for sale
From CBC - January 13, 2018

The island nation of Malta lures millions of tourists every year with its dramatic Mediterranean scenery and historic sights, but increasingly it seems rich Russian visitors are attracted by something they can take with them when they leaveMaltese citizenship.

Malta has just published a list of its newest citizens, and it's striking for the number of wealthy Russians on it. The list contains the names of the owners of Russia's biggest information technology companies, distilleries, real estate conglomerates and banksmore than 730 Russians in all.

All of them, it appears, paid the equivalent of $1.2 million Cdn to Malta's government to obtain Maltese citizenship, thereby also becoming a citizen of the European Union and gaining the visa-free travel to more than 160 countries that comes with it.

In fact, under Malta's Individual Investor Program, you do not even need to set foot on the island to qualifya simple international bank transfer will suffice.

Controversial policy

Maltese officials claim the controversial policy is designed to attract wealthy investors and has brought billions into the treasury, while many critics argue it has instead lured tax-cheats from other countries and facilitated money laundering.

Among the prominent names signing up with Malta are Arkady Volozh, who owns Yandex, the Russian equivalent of Google, and Alexey De-Monderik, the co-founder of the international computer security firm Kaspersky Lab.

There's no suggestion of anything illegal or improper about the citizenship purchases. Rather, Russian critics argue, they amounts to a sad commentary on the confidence Russia's business elite is showing in President Vladimir Putin's economic leadership.

Hedging risk

"They would like to find a quiet haven for their families and relatives, and buying a second passport is a chance to hedge their personal risk," said Ilya Shumanov, the Russian head of Transparency International, a European group that tracks the international flow of capital.

With a new round of U.S. economic sanctions about to hit Russia's business community, Shumanov says Maltese citizenship may also be a potential shield against their stinging bite.

"You are now a Maltese citizen and not a Russian onethe sanctions could avoid you," he said.

"They (the wealthy Russians) could cancel their Russian residence at any time. Sanctions will be imposed only on Russian oligarchs. Not on Maltese oligarchs."

Punishing Kremlin

The Russian president has been trying to encourage more of the country's richest citizens to bring their billions parked in overseas bank accounts back to Russia, though Shumanov says the results have been lacklustre.

"We now are seeing no one wants to return money to Russia. The capital has been leaving for many yearsnow they are trying to evacuate their families and relatives."

Billionaires vulnerable

Investor warning


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