Russian businessman Albert Avdolyan, who was sanctioned by the European Union over Moscow’s conflict in Ukraine, continues to benefit from his Maltese citizenship obtained through Malta’s controversial “golden” visa scheme. Despite the EU travel ban linked to these sanctions, Avdolyan can still circumvent restrictions due to the citizenship he acquired under the scheme, which is currently facing a crucial European Court of Justice ruling anticipated later this week.

Avdolyan received his Maltese passport in 2015. He is one of at least seven individuals who acquired citizenship from Malta and later became subject to sanctions by the United States, the EU, or Ukraine linked to Russia’s war in Ukraine. A broader group of 16 people were identified by the Financial Times as having successfully purchased Maltese citizenship despite being politically exposed individuals, facing sanctions, or having criminal convictions.

Malta remains the last European Union country to offer citizenship in exchange for investment—an arrangement that has drawn strong criticism from the European Commission. The Commission has taken legal action by bringing Malta before the European Court of Justice, arguing the scheme compromises the integrity and essence of EU citizenship. The court is scheduled to issue its ruling on Tuesday.

Such schemes, which allow citizenship or residency in return for financial investment, have been used in Europe and the Caribbean for decades but have faced increasing scrutiny over concerns related to corruption, money laundering, and tax evasion. The UK notably ended its own golden visa programme after it was criticised for enabling access for “corrupt elites.” Eka Rostomashvili of Transparency International commented to the Financial Times, saying: “It’s an insurance policy for some, it is an exit strategy for some . . . these schemes are very problematic for several reasons. It opens the EU’s doors, so not just Malta’s doors.”

The Financial Times reported that it is a recurring pattern for applicants to seek Maltese citizenship shortly before sanctions are imposed or prior to involvement in scandals or criminal prosecutions.

Holding a Maltese passport bestows the right to live and work anywhere within the EU, facilitates opening bank accounts and businesses throughout the bloc, and simplifies travel to numerous countries without requiring a visa.

Avdolyan stated in his citizenship application that Malta’s “reliability, security, peace, quietness and pleasant people” were significant draws. His application further noted that as a businessman, possessing a Maltese passport would aid “regular trips to Europe and around the world.” He owns coal and gas enterprises in Russia and, despite EU sanctions imposed in February—which say his businesses provide a substantial revenue source to the Russian government and describe him as “closely associated” with the state weapons conglomerate Rostec—Avdolyan and his immediate family retain their Maltese passports and the ability to travel to Malta.

The Financial Times’ investigation revealed that the Maltese government’s records included politically exposed figures and others later sanctioned or convicted. For instance, Evgeniya Vladimirovna Bernova, subject to US sanctions over allegations of facilitating the export of dual-use equipment to Russian entities for military purposes, holds Maltese citizenship acquired through a “thorough and multi-tiered due diligence process.” Bernova contested the US sanctions, describing them as a “misapprehension,” and highlighted her business investments and personal ties to Malta, including involvement in film production on the island.

Leaked documents from Henley & Partners, the private firm that designed and implemented Malta’s golden passport system from its launch in 2013, show the Avdolyan family acquired residency in 2014 and visited Malta multiple times over the following year. Henley & Partners arranged property rentals, lodging, and submitted supporting documentation such as hotel bills and private jet reservations to satisfy residency requirements. Identity Malta, the governmental body overseeing citizenship applications, confirmed that Avdolyan “in principle” met the 12-month residency condition.

Other prominent figures who have taken advantage of the scheme include three members of the Saudi royal family—Prince Khaled and his sons Bader and Mishaal—and “Gilberto Eduardo Gerardo Cojuangco Teodoro.” The latter name corresponds with the current Philippines national defence secretary; however, his lawyer denied he is a Maltese citizen or passport holder and declined to comment on any possible return of papers.

Among those who had their Maltese citizenship revoked is Russian millionaire Pavel Melnikov, who also holds a passport from St Kitts and Nevis. After Finnish authorities in 2018 raided his properties amid fraud investigations, Melnikov was convicted of tax and accounting offences in Finland earlier this year. He is appealing both his conviction and the revocation of his Maltese citizenship, which he argues was carried out “without legal grounds.”

The case of Semen Kuksov, who was jailed in the UK in connection with laundering criminal funds, further illustrates concerns over the scheme’s participants. The Crown Prosecution Service described Kuksov as a courier involved in collecting and transferring illicit money overseas.

While Cyprus and Bulgaria have discontinued their citizenship-by-investment programmes following pressure from the European Commission, Malta maintains its scheme. The Maltese government insists it has improved due diligence and excluded Russian and Belarusian nationals from eligibility. The citizenship scheme requires applicants to invest at least €600,000 in Malta, purchase or rent property, donate €10,000 to charity, and reside in the country for three years—reduced to one year for those investing €750,000.

Matthew Caruana Galizia of the Daphne Caruana Galizia Foundation, named after the investigative journalist who first exposed Malta’s golden passport scheme and who was assassinated in 2017, criticised the scheme’s fundamental problems. He told the Financial Times, “What Malta has done is sort of hacked the European Union… We created this commons in the EU, and now member states are starting to sort of eat [away] at it.” He further emphasised that increasing due diligence alone would not resolve the issues, attributing the problems to the nature of the scheme itself.

The European Commission issued a statement declaring that “EU values are not for sale” and that investor citizenship programmes should be abolished as they constitute a breach of EU law.

Should the European Court of Justice rule in Malta’s favour, campaigners warn it could prompt other countries, such as Cyprus, to contemplate reinstating or launching similar citizenship-for-cash schemes, potentially sparking a competitive lowering of due diligence and regulatory standards.

Sarah Nicklin, spokesperson for Henley & Partners, said the firm could not comment on individual applicants due to privacy laws but stressed that “individuals may pass all the stringent due diligence tests imposed, but still go on to engage in criminal activity.” She affirmed that Henley & Partners complies with the laws and regulations of the countries it operates in and noted Malta’s requirements for applicants to have genuine ties to the country.

No representatives of the Maltese government responded to requests for comment on this story. Sarah Nicklin also declined to comment on specific cases, citing data protection concerns.

The Financial Times is reporting.

Source: Noah Wire Services