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Due Diligence Guide for Obtaining Maltese Citizenship
Fundamentally, due diligence (DD) is a careful analysis of the risks involved when making substantial financial transactions. In the case of citizenship-by-investment, due diligence ensures that the funds invested in such a programme originate from legitimate sources.
The Maltese government has recently introduced the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment; as a result, Malta boasts one of the most comprehensive due diligence procedures in the industry.
A robust due diligence procedure is critical to safeguarding the integrity of residency or citizenship programmes, while also signalling to potential investors that they are dealing with a serious and reputable jurisdiction.
How Malta performs its due diligence process
In Malta, the government entity responsible for carrying out due diligence process is called Komunità Malta (Community Malta). This agency handles all matters related to Maltese citizenship—including applications for citizenship-by-naturalisation for exceptional services by direct investment—and carries out in-depth due diligence on each application before recommending whether the government should grant citizenship to an individual.
All employees working within the diligence section at Community Malta undergo extensive anti-money laundering (AML) training and have a banking and auditing background.
The due diligence process developed by the Maltese authorities has earned widespread international praise for its high standards and focus on attracting talent that adds value to the country. The citizenship programme uses a four-tier process to gather information and compile a risk assessment on every applicant.
Overview of the four-tier due diligence process
First Tier: Standard know-your-client (KYC) screening carried out independently by Community Malta and the Agent appointed by the applicant through international databases.
Second Tier: Clearance checks with Interpol, Europol, and other police authority databases. Third-country nationals who need a visa to travel to Malta must also go through the standard Schengen visa application process.
Third Tier: Agency assessors perform a completeness and correctness check of the application to identify any anomalies and highlight the potential risks. The agency also carries out further checks against world-check databases and reviews the sources of funds and wealth.
Fourth Tier: The assessors compile a risk assessment report using a risk matrix and present their findings to the agency board. The board uses the information gathered to take a collective decision on whether to recommend an application to the Minister for Citizenship.
A transparent and consistent way to measure risk factors
The risk matrix mentioned in the fourth tier is a standard mechanism which guarantees that the agency examines each applicant consistently and thoroughly. The matrix also guides the agency board's collective decision, thus ensuring greater transparency in the process.
The risk matrix adopted by Community Malta uses the following seven categories to measure an application’s potential risks:
- Identification and verification of an applicant's background.
- Examining business and corporate affiliations, including ties to offshore activities.
- Classifying politically exposed persons (PEPs) or people whose names appear on specific lists.
- Reviewing of sources of funds and wealth with a strong focus on documented evidence.
- Assessing the applicant's overall reputation.
- Collecting information about legal and regulatory matters, including previous charges or convictions.
- Analysing the relative impact of citizenship on the applicant's immediate network and society in general.
Setting the standards of citizenship applications
In coordination with the European Union, and to fulfil international obligations, Malta has successively enhanced the application process of its citizenship programme over the years to include tighter controls and other safety measures.
Malta’s due diligence for citizenship applications has earned recognition globally for its thoroughness, consistency, and transparency. At RC International, we specialise in assisting individuals interested in learning more about the Malta Citizenship For Exceptional Services by Direct Investments 2021 and prospective candidates who want to kick-start the process of obtaining Maltese citizenship and residency.
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