Murky world revealed in #GoldenVisa schemes to pose corruption risk to the EU

| March 6, 2018

A series of investigations published on Monday (5 March) by the Organized Crime and Corruption Reporting Project (OCCRP), a renowned investigative reporting organization, show how access to the border-free Schengen area and EU citizenship are sold to foreign investors by European countries with little scrutiny and transparency, writes Letitia Lin.

According to the OCCRP’s findings, a number of the tax evaders and money launderers were granted residency status or citizenship by several EU countries, notably Malta, Cyprus, Hungary and Portugal, through investments ranging from €250,000 to €10 million in property, businesses, or government bonds.

New EU citizens under these schemes include the Russian oligarch Oleg Deripaska, three persons from the ‘Kremlin list’ who are believed to have close ties to Russian President Vladimir Putin, and several members of Angola’s ruling class.

Rami Makhluf, a cousin of Syrian President Bashar al-Assad, was granted Cypriot citizenship in January 2011, four months before designated by the EU for bankrolling the Assad regime. His EU citizenship was withdrawn two years later.

“It is clear that due diligence procedures in some EU countries, such as Hungary and Portugal, have not been rigorous enough,” said Casey Kelso, advocacy director of Transparency International, who has partnered with the OCCRP to the investigations.

“Citizenship and residency are among the most valuable assets a country can offer an individual, but EU member states have not even been applying the same minimum checks that banks are supposed to apply to their high net-worth customers,” Kelso added.

13 European countries (Austria, Belgium, Bulgaria, Cyprus, Greece, Latvia, Lithuania, Malta, Monaco, Portugal, Spain, Switzerland, and the UK) currently offer the ‘Golden Visa’ programmes under various terms. In some countries, the wealthy can secure citizenship immediately. The exact number of citizenship or residency recipients is unclear due to the opaque nature of application process.

Hungary ran an investment immigration programme between 2013 and 2017 and may relaunch it after the April 2018 parliament elections. The whole application process was promised to be concluded in 20 days. During the four years, 6,585 non-EU citizens, mostly Chinese, were granted permanent residence permits under the programme.

“This is an EU-wide issue,” said Rachel Owens, Head of EU Advocacy at Global Witness, an international anti-corruption NGO. “When you get a Hungarian or an Austrian passport, you actually get an EU passport and you are able to travel in all 28 member states.”

In January 2014, the European Parliament warned about the risks of ‘Golden Visa’ schemes in a joint resolution. However, no further actions were taken because the issue was considered as one at national level.

Bribery has also been revealed in the ‘Golden Visa’ schemes. Last year, several Portuguese officials were put on trial for being involved in corruption scandals related to Portugal’s immigrant investor programme.

Moreover, the investigations released by the OCCRP point out that profits received by the governments are questionable. In Hungary, a net loss resulting from the residency-by-investment schemes reached around €16 million by the end of 2017.

Transparency International and Global Witness have together called on the EU to closely monitor the ‘Golden Visa’ schemes and identify the relevant policy mechanism. The European Commission is due to publish a report on the impact of the immigrant investor schemes later this year.

In response, Commission spokesperson Christian Wigand said that the report would describe the Commission’s action in this area and provide some guidance for member states.

The OCCRP’s investigations on the ‘Golden Visa’ schemes are still ongoing. 20 reporters have spent six months looking into the ‘Golden Visa’ programmes of eight EU member statesAustria, Bulgaria, Cyprus, Hungary, Latvia, Lithuania, Malta and Portugalas well as programmes proposed by Armenia and Montenegro.

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Category: A Frontpage, Crime, EU, European Anti-Fraud Office (OLAF), Law, Money laundering, Victims of crime

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