Over the past few years Malta has taken to selling citizenship. For a fee you can get your hands on a genuine Maltese passport and set of identity documents. Malta’s been criticised but is there a downside to printing money like this?
Learning from history
Consider the following taken from news reports:
The authorities in Malta provide passports to foreigners. It claims that there are justifiable reasons to do so and keeps issuing passports. The Algerians capture a group of people bearing Maltese passports and imprison them. Malta negotiates for their safe return but no argument sways the Algerians. It reaches a point where Malta is ready to go to war with Algeria.
I took this from the headlines of 1803.
By 1801 the British had ousted the French from the islands. They had destroyed every boat in the Grand Harbour for firewood before leaving. Malta depended on trade to be able to feed itself so a lack of shipping meant people would die. The British relied on Neapolitan and Sicilian merchants for trade. These were wary of Barbary pirates and asked the British for help1.
Realising the islands needed trade, and realising this would be a great way to keep the islands under control, Sir Alexander Ball issued Maltese passports to anyone trading from Maltese ports. This pass was valid for one voyage to an identifiable port and back again. Anyone with a Maltese passport had to return it when back in Malta. In return, anyone with a Maltese passport had the right to protection of the British Navy.
Algeria arrests people with “Maltese” passports. Malta is ready to go to war.
In the authorities’ mind, the need to feed the local population justified their decision to issue Maltese passports to foreigners. Sir Alexander Ball later noted that since Maltese people staffed the ships, the spirit of international law was maintained.
The Dey of Algiers had signed a peace treaty with the United Kingdom so British, and by extension Maltese, vessels were safe from pirates. Algiers did not have a peace treaty with Naples or Sicily. In 1803, cruisers of the Dey of Algiers captured four Sicilian ships bearing Maltese passports. He imprisoned the crew, including Maltese people, for ransom.
At this stage, 2 years after the food crisis, the Maltese didn’t need to depend on foreign merchants any more. The British had invested money to help locals buy and build new boats. The Maltese were importing grain and food on their own behalf. There still were foreigners who had held on to their Maltese passports and the captured ship was one example.
Lord Nelson appeared off the coast of Algiers with seven ships of the line to try to persuade the Dey to release the prisoners. He failed to convince the Algerians. Sir Ball took this to mean war. Lord Nelson disagreed. He refused to accept that Maltese passports meant the British should protect these people. British ministers in London sided with Nelson and war was avoided.
It’s a fascinating story but, I hear you ask, what has this got to do with the current state of sale of Maltese passports?
A passport pattern
The facts of the story show two clear points:
- It was vital to feed the starving masses on the island in 1801. Since Maltese passports provided the necessary reassurance, Sir Ball was correct to issue them. The recipients were foreigners but this doesn’t make his decision invalid.
- Lord Nelson was also correct to decide the intent behind the Maltese passports – British protection – was no longer valid. The alternative was going to war and that didn’t make sense in the context of the day.
These are important lessons for the situation today.
Maltese Prime Minister Joseph Muscat has explained how the sale of passports is beneficial for the treasury. They are because the money is being used to wipe off debt and invest in key infrastructural problems. This is not sustainable but it’s hard to debate macro economics when positive upbeat messages are the counter argument.
The real question is: What happens when the Maltese state has to meet its obligations behind those passports?
What obligations does Malta (i.e., we) have to passport holders?
Or rather, what obligations does Malta have to passport holders?
Passport: Rights and expectations
We’re all aware of the basic entitlements which Malta provides its citizens. These are benefits like a welfare state or free medical care. Given the hefty price tag it is unlikely people buy them to get free medical care. It would be cheaper to pay your medical bills. It’s reasonable to conclude the people paying hundreds of thousands of Euros are not in it for these sort of things.
One interesting obligation is consular services. If I’m in a country when a catastrophe hits I am entitled to consular help from my embassy. If I was in Indonesia when the tsunami hit, or in Argentina when their 6.4 earthquake hit, I could find my embassy and ask for help. If I lost my belongings in these disasters my embassy should help.
We know of Chinese, Russian and Middle Eastern people who bought Maltese citizenship. What if I was a Russian oligarch who bought Maltese citizenship to avoid Russian taxes? What if I happened to be in the Ukraine when Russia invaded in 2014? In theory such a person would be able to wave his Maltese passport at the embassy and ask for help. This would attract negative Russian attention our way. Would we want to do that?
Should Malta ignore Maltese who get caught up in Russian affairs? We could try to do the same thing Lord Nelson did. We could claim this wasn’t part of the bargain and we could ignore their cries for help.
I’m not sure that would be wise.
These are people who can drop EUR 650 000 for a passport. I wouldn’t want to piss them off.
How does this affect the rest of Europe?
European rights and expectations
There’s an important layer of obligation to add to this example. According to EU law any European citizen can get consular services from any European Union embassy. In my example above, the Russian/Ukrainian/whatever would wave his Maltese passport at the Dutch or Estonian embassy and expect help.
Are our European allies okay with this state of affairs?
The European Union was powerless to stop Malta from selling passports. This was obvious – the Union does not have the authority to interfere in a Member State’s citizenship decision.
This doesn’t mean Europe is ignoring it. There are statements from European Commissioners and parliamentarians who wish to investigate this. I can’t say I blame them.
Are we in hock to unknown murky elements of the criminal underworld? The Maltese government assures us we’re not but refuses to publish more details about things. That makes me suspicious.
Making money is not enough to claim this is a good scheme
I worry because there are many unknowns.
Unknowns mean we don’t know if this is good or bad.
PS: I know we’re making money from it. That is not enough to make it good.
- Coleridge’s Laws: a Study of Coleridge in Malta; Barry Hough and Howard Davis; Cambridge OpenBook Publishers; 2009
- Argentina earthquake: 6.3-magnitude tremor hits near town of Ushuaia; Zamira Rahin; The Independent; 2018-10-28
- Tax evasion: blacklist of 21 countries with ‘golden passport’ schemes published; Juliette Garside; The Guardian; 2018-10-16
- Citizenship by Investment Malta; Malta Immigration; (Retrieved 2018-10-29)
- Consular protection for European Union citizens abroad; European Commission (Retrieved 2018-10-29)
- Malta slammed for cash-for-passport program; Harry Cooper; Politico.eu; 2016-08-17
All references were valid and correct when this article was published. Changes to referenced websites or web pages may render some references invalid. If this is the case, please leave a comment below.
Written by: Antoine P Borg
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