Local audit and law firms licensed as agents of Identity Malta in the cash-for-passports scheme are concerned about the interpretation of two contracts the government has part published, which cover its connections with foreign firm Henley & Partners.
According to the firms that spoke to Times of Malta, the publication of these two contracts raised more questions than answers about the involvement of Henley & Partners in the scheme.
“Apart from the large chunks of the contracts which were blacked out by the government, we are concerned that local agents are still not on the same footing as H&P as was promised by the Prime Minister,” one lawyer told this newspaper.
“Is H&P still receiving the same commission as if it had exclusivity?” a Mosta-based accountant asked.
Originally, when the government first announced the cash-for-passports scheme a few months after being elected, it signed an exclusive contract with international firm Henley & Partners, giving it sole rights to administer and market the Individual Investor Programme (IIP).
However, following an uproar by local firms interested in selling the scheme, the government backtracked and signed a second contract with H&P, removing its exclusivity and placing it on par with the local firms who wanted to act as agents.
Although the two contracts have now been published by the government and their contents discussed in Parliament, the fact that some sections were redacted has raised questions among competing firms on whether Henley & Partners is still being paid hefty commissions as if it were still the exclusive agent.
Is H&P still receiving the same commission as if it had exclusivity?
According to the first contract, signed on the basis of exclusivity, H&P was to be paid a commission of €26,000 for each passport sold, over and above its normal professional fees. The amended contract, however, does not include information on the commissions and other payments they are entitled to – the government redacted that section of the agreement, citing commercial sensitivity.
According to the local agents, blacking out this part of the amended contract may not be a coincidence.
“While H&P is no longer doing the processing, exclusive marketing and due diligence, we don’t know how much is its new commission. Has it stayed the same despite the changes?” one agent asked.
The government has yet to clarify the situation. Questons sent to the Office of the Prime Minister at the begining of the month remained unanswered before going to print.
The independent regulator of the programme, Godwin Grima, has already raised the issue of the government’s connection to H&P.
In his first review of the IIP, he said that the law should be changed, as it is not clear about the duties of Henley & Partners and those of Identity Malta, the government agency responsible for the programme.
He said that although the law stated that the operation of the programme shall be carried out by H&P, the impression Identity Malta gave in meetings with Dr Grima was that the govern-ment had taken more of a lead in the implementation of the programme.
“The regulator feels that Identity Malta’s stance will lend more credibility to the process, but still it would be more prudent to amend the legal notice to reflect the true state of play,” Dr Grima said.
Asked whether the government would adhere to the regulator’s suggestion, the Prime Minister’s spokesman did not reply.