The European Commission, unable to crack down on multi-billion euro schemes run by Bulgaria, Cyprus and Malta that allow wealthy non-EU nationals to buy passports to gain EU citizenship, is setting up an expert group to probe the abuse.
The commission on Wednesday (23 January) announced the plan as part of broader effort to fight crime, money-laundering, and tax evasion.
“We cannot afford to keep any weak points, and here we see the weak points – especially in the citizenship schemes, which are run by Malta, by Cyprus, and still by Bulgaria,” said EU justice commissioner Vera Jourova.
“The country sells the EU citizenship, so in practice, the country sells something that it doesn’t own,” she said, noting that the EU has no legal avenue to ban the practice.
Cyprus has in the past sold passports to wealthy Syrians and Russians covered by EU or US sanctions, while senior figures within Malta’s government have been accused of receiving kickbacks over the schemes.
One of those sold in Cyprus went to Russian billionaire Oleg Deripaska, who has close links to Putin.
The commission now wants more transparency and guarantees on security and anti-money laundering to help negate abuse.
Part of that effort includes setting up a group of experts drawn from each EU state before the end of the year.
The group will look into transparency of the schemes, number of applicants, country of origin, and number of ‘Golden Passports’ that entitle wealthy people to purchase citizenship and all the EU rights that come with it.
Bulgaria, Cyprus and Malta also sell ‘Golden Visas’, along with 17 other EU states, which give people the right to reside legally in a member state.
“In terms of amount, the scale ranges from a very low investment below €100,000 to a very high investment of over €5m. And what investors get in return also greatly varies,” said Dimitris Avrampolous, EU home affairs commissioner.
The Golden Visas vary from six months to 10 years, and are also seen as a fast-track towards national citizenship and therefore EU citizenship.
The commission is demanding member states offer greater guarantees that people who do purchase citizenship have a genuine link with the state.
Some are pressing for the commission to go further.
NGOs Transparency International and Global Witness in a joint statement said the commission needs to get tougher on Golden Visas.
“The commission’s report tells us nothing about what member states actually need to do – now they’ve sounded the alarm, they need to offer solutions,” said Naomi Hirst, senior anti-corruption campaigner at Global Witness.