Russia’s business elite are snapping up Maltese passports amid EU and US sanctions.
Those who forked out for Maltese and – by default – EU citizenship last year included Arkady Volozh, the founder of Yandex, a Russian Uber-type firm, and his entire family.
They also included: Alexey Marey, the former CEO of Alfa Bank Russia, the country’s largest private lender; Alexey De-Monderik, a co-founder of Russian cyber security firm Kaspersky Lab; and Alexander Mechatin, the CEO Beluga Group, Russia’s largest private spirits company.
The newly-minted Maltese nationals emerged in a list of more than 2,000 names published in the country’s legal gazette at the end of last year.
The gazette does not say who bought passports in 2016 and who was naturalised for other reasons.
But the names of wealthy foreign nationals stand out as the most likely to have paid the €1.1 million in fees, Maltese bond, and Maltese real estate investments that it costs to get nationality.
The Russian roll-call for 2016 went on to name: Dmitry Semenikhin (a media millionaire); Alexander Rubanov (energy firm executive); Roman Trushev (oil and gas); Andrey Gomon (transport magnate); Alexey Kirienko (investment broker); Dmitry Lipyavko (petroleum products tycoon); Andrei Melnikov (cobalt and uranium magnate); and Anatoly Loginov (owner of an online payment systems firm).
It also named Russian real estate developers, retailers, and agricultural land owners.
It came out after the previous gazette showed that 40 percent of new passport buyers in 2015 were also Russians.
Owning a Maltese passport gives people the right to visa-free travel to 160 countries, including the US, and to live and move around their money anywhere in the EU.
The surge in Russian applications comes after the EU and US imposed economic sanctions and visa-bans and asset-freezes on Russia over its invasion of Ukraine in 2014.
It also comes amid US plans to create a new blacklist on 29 January 2018 of cronies of Russian president Vladimir Putin over his meddling in the 2016 US election.
“The list of new citizens of Malta … has enough well-known Russian names to drive home an uncomfortable truth for the Kremlin: the Russian elite doesn’t feel attached to Putin’s besieged fortress project”, Leonid Bershidsky, a Russia expert at the Bloomberg news agency, said on Thursday (11 January).
“They’re not emigrating … but they are unwilling to put all their eggs in Putin’s basket, which is a source of constant annoyance for him,” Bershidsky said.
The influx of Russians also poses questions on the quality of Maltese due diligence in rooting out fraudsters and other undesirables.
The Maltese government has fiercely denied criticism that it was turning the island into the kind of haven for illicit Russian money that Cyprus has become.
Cyprus, which also sells passports in return for a €2 million investment, issued 2,000 new ones in the past two years, almost half of which went to Russians.
A leaked German intelligence report said in 2012 that Russian criminals had stashed billions of euros in Cypriot banks, amid questions to what extent the financial ties shaped Cyprus’ Russia-friendly foreign policy.
The Maltese scheme is cheaper than the Cypriot one and does not require new nationals to regularly visit Malta.
The issues came to the fore last October when a car bomb murdered a Maltese journalist, Daphne Caruana Galizia, who claimed to have evidence that prime minister Joseph Muscat’s chief-of-staff, Keith Schembri, was involved in laundering money from kickbacks by passport applicants.
New EU elite
The 2016 list of new Maltese and EU citizens includes Leonid Korotkov, the former governor a Siberian region whom Putin sacked for abuse of office.
It contains Igor Khudokormov and Leonid Levitin – two Russian offshore banking tycoons named in the so-called ‘Panama Papers’ leaks.
It also includes Ibrahim Waleed Alibrahim, a Saudi sheikh who was recently arrested on corruption charges, and Dragan Solak, a Serbian-Slovenian media magnate named in the so-called ‘MaltaFiles’ leak for having used a Maltese shell company to dodge taxes.
The Russian branch of Transparency International, an NGO, in a report out on Monday identified several shady Russian nationals who have settled in Malta.
It said the Maltese passport scheme had created “additional opportunities for corrupt officials”.
“Such a scheme is attractive in that it allows laundering large sums of money … European banks consider holders of ‘gold passports’ as local residents, and not as suspicious foreigners. In fact, it is a question of reputation laundering,” the NGO said.
See no evil
Muscat himself denied that Malta was being corrupted in an interview with the BBC also on Monday.
He said money laundering there was no greater a problem than it was in Luxembourg, the Netherlands, or the UK.
He also said he did nothing wrong in going to Dubai to promote the passport scheme in the same week last year as Caruana Galizia’s assassination.
He dismissed her allegations about passport-sale kickbacks as being nothing more than “false” and “dubious” social media “gossip”.
“I’m in a quite horrible situation having to criticise someone who was killed brutally,” Muscat said.