What does the due-diligence process of the Malta Individual Investor Program entail?

I was told that the Malta Individual Investor Program has the world’s strictest due-diligence standards and involves a four-tiered system. What exactly does the process include? What are some key factors that an applicant needs to pay attention to?

Answers

On July 05, 2018 Wayne Pisani answered:

The process entails screening by the introducing agent, Identity Malta (the issuing authority), and two independent compliance agencies verifying the background of the applicant to build a profile in the basis of educational and business background while screening for adverse issues, including sanctions, criminal records, political exposure, terrorism, fraud, wrongdoing, etc. The process also entails a medical screening. Proof of source of wealth is to be provided.

On July 04, 2018 Nicky Gouder answered:

The four-tier system adopted for the purpose of the MIIP includes the initial due-diligence checks undertaken by the accredited agent during the onboarding of the client, Interpol police checks and enhanced due-diligence undertaken by the Malta Individual Investor Programme Agency (MIIPA) during the initial and last stage of the application. Enhanced due diligence is undertaken on every single applicant and relevant dependents included in the application for the purpose of the MIIP. Becoming a citizen of Malta entails not just a financial commitment by the applicant, but also a commitment by Malta toward the E.U. in particular and the rest of the world that its citizens are of good repute. Naturally, high net worth individuals may impact the reputation of a country when they become citizens, which is why the process is very stringent to ensure that only the best candidates are considered as potential citizens. The agency will undertake a holistic check on the applicant’s source of wealth and funds, employment, business history and family background to ensure that it can make an informed and realistic recommendation to the minister.

On September 27, 2018 Valentina Sammut answered:

Yes, the Malta IIP has a four-tier due diligence process, which is considered the most stringent, and of the highest standard, in the industry. Per Malta Individual Investor Agency there are four tiers. The first tier is the standard KYC due diligence done by both the IIP unit and the agent through databases such as World-Check. The second level is the clearance obtained from the police authorities following thorough checks through a number of databases, such as Interpol, Europol and others. Any issues encountered at this stage are reported back to the IIP Unit. It has to be pointed out as well that to be able to visit Malta, third-country nationals (TCNs) have to go through the standard Schengen screening procedures. The IIP team takes care of the third tier of due diligence. There are two stages at this level. The first is that of completeness and correctness of the application. This in itself would identify anomalies in the application form that highlight any potential risk. Every kind of accompanying documentation submitted to the IIP unit is checked to ensure that it has been filled in correctly and that the documents are submitted in the proper format, correctly translated, and apostilled or notarized, as the case may require. Where documents are missing, not in the correct format or errors are identified, a request for submission is made to the agent representing the family applying for Maltese citizenship and the application process is paused until everything is in order. The second stage is that of a thorough, in-depth online due-diligence check and verification of documents submitted. These checks involve checking with international databases for sanctioned individuals and companies. Searches are conducted on all the members of the family applying for citizenship, their corporate affiliations, any significant one-time transactions, donations or inheritance, and any significant business partners or very close associates. The fourth level is conducting outsourced due diligence. Two reports are commissioned from international companies on every family to ensure that as much ground as possible is covered and no stone remains unturned. These checks would include verification of all the information submitted, checks with databases, both international and local, in each of the family’s country of residence, and even discreet on-the-ground interviews with individuals who know the family. As soon all these checks are done, another member of the due-diligence team reviews all the information collected both internally and externally and puts all the pieces of the jigsaw puzzle together to prepare an internal memo. In cases where more clarity is required, the IIP unit goes out with further questions to the applicant to ensure it has the right and proper picture of the family’s application. Where necessary, information is bounced back with the due-diligence companies to ensure coherence. Once all questions are answered, every application is first discussed internally within the IIP due-diligence team. The team is composed of eight individuals from a banking and audit background, and who are trained in anti-money laundering regulations. Together, they share the information internally and corroborate the information gathered, which is then discussed again with the senior management team within the IIP unit. If the team deems that more information or clarifications are required before a recommendation is made to the minister, these are requested from the applicant. In some instances, another report is requested on specific areas of concern.

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