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Golden Passports - 'Corruption in these schemes is systemic and requires a strong EU response'

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Cyprus has announced that it will abolish its citizenship-by-investment scheme as of 1 November 2020. The decision came after a documentary by the Investigative Unit of Al Jazeera showed through leaked documents and covert filming how the scheme was being used by criminals. The film showed how Cypriot business people and politicians were involved.

Asked about the film, a European Commission justice spokesperson said: “We watched in disbelief at how high-level officials were trading European citizenship for financial gain. President von der Leyen was clear when saying that European values are not for sale. 

“As you know, the Commission has frequently raised serious concerns about investor citizenship schemes, also directly with two separate authorities. The Commission is currently looking into compliance with EU law of the Cypriot scheme in view of possible infringement proceedings. We are also aware of the latest declarations of the government that you just mentioned. and expect the separate competent authorities to formally look into this case.”

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Sven Giegold MEP called for the prompt initiation of infringement proceedings, saying: “The Mafia-like structures in Cyprus have not been crushed with the suspension of the passport sales.” 

Giegold has requested that the issue of 'golden passports' be added to the agenda of next week’s plenary of the European Parliament: “There are also similar programmes in other countries: Malta and Bulgaria also sell EU passports with questionable programmes. Considerable security risks also exist in connection with residence permits that can be purchased, so-called golden visas. The biggest seller of golden visas is Portugal, offering access to citizenship after six years.

“The Commission must take action against the sale of passports and visas with infringement proceedings in all relevant member states. The Council and the German government should speak out against the sale of citizenship rights.”

The Commission has looked into the growing trend in the EU in investor citizenship (“golden passport”) and investor residence (“golden visa”) schemes, which aim to attract investment by granting investors citizenship or residence rights of the country concerned. Such schemes have raised concerns about certain inherent risks, in particular as regards security, money laundering, tax evasion and corruption. However, granting citizenship remains very much in the gift of Europe’s individual member states and the EU cannot forcibly intervene. 

Transparency International Research and Policy Expert on Corrupt Money Flows Maira Martini said: “The allegations reach the highest level of politics in Cyprus and these must also be fully investigated, with no impunity for corrupt acts. We want to see a proper analysis of previously awarded passports and revocations, where necessary.” 

Transparency International EU Laure Brillaud Anti-Money Laundering Policy Expert said: 

“Yesterday it was Malta, today it is Cyprus, and tomorrow it will be another EU country’s golden visa programme under the spotlight. The problem of corruption in these schemes and their abuse is systemic and requires a strong response from the EU. We need a solid legislative proposal from the European Commission on how these programmes can be regulated until they are phased out.”

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