A real estate agent has received a fine of €48,000 from the Financial Intelligence Analysis Unit of Malta after failing to verify the source of wealth of a golden passport holder who acquired €2 million property.
In 35 per cent of the files checked by Malta’s FIAU, several buyers posed a significant risk of money laundering because they bought expensive properties or used their own funds for the purchase, SchengenVisaInfo reports.
According to a report from Malta Today, the real estate company didn’t do thorough controls on these purchases.
One example involved a client who acquired citizenship in Malta through Malta’s Golden Passport Program. The client bought two properties in a special real estate area on the island, totalling more than €2 million in value, all within a year.
The real estate agent collected information about where the buyer’s money came from, like their business in a non-EU country and financial statements from a local company they owned. Yet, it wasn’t enough for these reasons.
FIAU said that it was not enough for the company to simply collect the source of wealth information, after the company was then expected to verify the veracity of such information against documentation, particularly in view of the risks pertaining to the two files.
This could have been done by performing open source or internet checks on the purchaser to verify the information on the purchaser’s wealth, occupation, and business activities, which could have served to further corroborate the declared source of wealth.
Besides, the financial statements also revealed that the client company was not profitable and experienced year-on-year losses.
The fact that the client was able to inject around €200,000 as a shareholder’s loan does not provide sufficient justification to account for the source of funds behind an accumulated purchase of property worth €2 million.
Over 1,500 Golden Passport Applications in Malta Since 2014
Malta’s Golden Passport Scheme allows foreign internationals to acquire citizenship in this country, by financially investing and meeting the needed criteria.
Last year, Malta’s Minister for National Security, Byron Camilleri, said that over 1,500 requests for Malta’s Golden Passport scheme have been received by authorities in Malta since 2014 when the scheme was first introduced.
The scheme was often criticised for being involved in irregular affairs. In December last year, the Audit Office said that Malta’s posterity fund, fueled by millions from golden passport sales, does not have clear rules for choosing projects that receive funding.
