The government has given in to pressure by Henley & Partners and accepted lifting the 1,800 passport sales cap negotiated with the European Commission on the sale of Maltese passports.

Sources close to Identity Malta confirmed to the Times of Malta that the private concessionaires awarded a multimillion-euro contract soon after Labour returned to power in 2013 lobbied intensely with the Prime Minister to remove the cap.

“Henley & Partners and other agents have been insisting with the government to increase the number of Maltese passports which can be sold. At first, the government resisted the idea. However, it has now changed its mind, as this scheme is resulting in a good money stream for the economy,” a senior Identity Malta official told this newspaper.

Last year, in an interview with this newspaper, the Swiss president of Henley & Partners, Christian Kalin, said his company was lobbying the Prime Minister and his senior staff to lift the cap.

Read: Brussels ‘abuse’ on IIP

“It is entirely up to the Maltese government to decide. Our advice is to continue and lift the cap. It’s obviously in our interest,” said Mr Kalin, whose company takes commissions from each Maltese passport sold.

Last week, shortly after announcing the election, Dr Muscat said lifting the IIP cap would be one of the first things his new government would implement. No further details were given.

Asked yesterday to say whether the removal the cap, negotiated with the European Commission, would need some kind of approval from Brussels, the Office of the Prime Minister said the government would seek to extend the programme once it had reached its limit. This would be done after discussions with the European Commission.

Following the announcement of Malta’s cash-for-passports scheme in 2013, an uproar erupted, particularly among members of the European Parliament who opposed the sale of Maltese citizenship, which indirectly gave non-EU citizens all the rights enjoyed by EU citizens.

Read: New citizenship programme creates bond with Malta - Muscat

In order to calm the waters, the government entered into negotiations with the European Commission, adding some new conditions to make the scheme more acceptable.

The limit of not more than 1,800 passports sold to main applicants was one of the issues agreed upon. It is not yet known how many Maltese passports have actually been sold.

According to the latest data given by the scheme’s regulator, at the end of June 2016, there were 723 main applicants and 1,186 dependents seeking a Maltese passport.

Some €166 million was collected by Identity Malta, and more than €5 million went as commissions to Henley & Partners. According to the concession agreement, senior members of the Maltese government are contractually bound to participate in sales promotions around the world organised by Henley.

Research conducted by this newspaper (see table) shows that on most occasions, it was the Prime Minster himself who attended the roadshows, mostly accompanied by his chief of staff, Keith Schembri.

Since October 2013, Dr Muscat has attended 11 conferences to promote the sale of Maltese passports. On almost every occasion, he was accompanied by Mr Schembri, except on the last two.

Mr Schembri is currently undergoing a magisterial inquiry following claims by Nationalist Party leader Simon Busuttil that he received kickbacks from the scheme’s proceeds.

An FIAU investigation found that €100,000 in proceeds from the scheme was passed to Mr Schembri by Brian Tonna, the owner of Willerby Trade Inc, through a company registered in the British Virgin Islands.

Mr Schembri denied the funds were a kickback and said they were the settlement of a personal loan. No transaction for the original loan was found by the FIAU.

The report was given to the Police Commissioner and the Attorney General for further investigations and possible prosecution in May 2016, but nothing has been done so far.

The identity of Willerby was discovered through the publication of the Panama Papers leaks in April 2016.

Muscat takes to the road for IIP