The problems and scandals surrounding the sale of ‘Golden Passports’, which allows their holders unrestricted access to EU members states and dozens of countries, have been brought to the fore by Al Jazeera’s recent investigative report.
Wider issues with golden passports
As of summer last year, 3 EU member states, Malta, Cyprus and Bulgaria, offered ‘citizenship-by-investment’ (golden passports) schemes and 20 EU member states, including the UK, offered ‘residence-by-investment’ schemes according to a report by the anti-corruption NGO Global Witness.
At that time, Tina Mlinaric, a campaigner at Global Witness said: “This exposes the whole of the EU to significant money laundering, tax evasion and corruption risks, as well as threatening its security.
“It’s also the case that these schemes are shrouded in secrecy so the impact is only understood when scandals hit the headlines, meaning the urgency of the issue is being ignored.”
In March 2018, Gold for Visa investigations by the Organized Crime and Corruption Reporting Project (OCCRP) illustrated rampant sale of EU citizenship and residency to ultra-rich foreign investors with little scrutiny, transparency or due diligence.
In October 2018, a report by Transparency International and Global Witness European Getaway Inside the Murky World of Golden Visas highlighted the corruption risks posed by the sale of citizenships (golden passports) and residency and how these schemes threaten the integrity of the EU.
Casey Kelso, advocacy director at Transparency International said: “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.”
The European Commission published a comprehensive report on ‘citizenship-by-investment’ (golden passports) and ‘residence-by-investment’ schemes operated by a number of EU Member States in January 2020.
The report highlighted the risks these schemes imply for the EU, in particular, as regards security, money laundering, tax evasion and corruption – and how a lack of transparency in how the schemes are operated and a lack of cooperation among Member States further exacerbate these risks.
Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos said: “Legally residing in the EU and in the Schengen area comes with rights and privileges that should not be abused.
“Member States must at all times fully respect and apply existing obligatory checks and balances – and national investor residence schemes should not be exempt from that.
“The work we have done together over the past years in terms of increasing security, strengthening our borders, and closing information gaps should not be jeopardised. We will monitor full compliance with EU law.”
Commissioner for Justice, Consumers and Gender Equality, Vera Jourová, said: “Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market.
“People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States.
“There should be no weak link in the EU, where people could shop around for the most lenient scheme.”
And in the last few days German MEP Sven Geingold said “The European Commission should put Cyprus before the European Court of Justice. The passport scheme of Cyprus is a risk to security in Europe.
“You should earn your passport and your citizenship by integrating in society. And not because you have a lot of money.”
Stop the EU from being a safe haven for the corrupt and criminal
It is clear from reports by Global Witness, OCCRP, Transparency International and the EU itself that Europe must do ‘something’ to regulate, legitimise, de-risk, or phase out the ‘citizenship-by-investment’ and ‘residence-by-investment’ schemes offered by EU members states.
Speaking on the subject last week, Transparency International EU’s Senior Policy Officer Laure Brillaud said:
“It has now been more than two years since the first golden visa scandals broke out. And yet, we are still waiting for the Commission to deliver on its commitment and stop the EU from being a safe haven for the corrupt and criminal.”