Time to end EU golden visas for corrupt elites

Citizenship and residency by investment programmes - or "golden visas" -  have long been Europe's Achilles heel in its defences against suspicious wealth.

At a time when refugees fleeing war zones are being denied entry, global elites are buying their way into Europe to enjoy luxury lifestyles.

It is time the EU scrapped these risk-ridden schemes and prove it is serious in slamming its gold-plated door to money laundering and corruption.

Over the last decade, the EU has witnessed a growth in the number of golden visa schemes, offering a fast-track citizenship and/or residence to foreign nationals in exchange for a substantial investment.

The need to recover from the financial crisis has often been cited as the reason for such expansion.

After all, financial flows generated by such schemes can, especially in the case of smaller countries, such as Malta or Cyprus, have a big economic and fiscal impact.

Yet, there is a much darker side to these schemes. 

So dark, that the European Commission has in its recent supranational risk assessment of EU money laundering and terrorist financing risks stated that golden visas schemes pose "significant'"to "very significant" levels of threat and vulnerability for money laundering and terrorist financing. 

Why are these schemes so risky?

For criminal and corrupt individuals trying to avoid confiscation of their assets or prosecution in their home country, a golden visa provides an attractive opportunity to stash assets in a safe haven, avoid law enforcement, and even the chance to set up a new enterprises in Europe.

Free pass

For this class of elite they are in effect a 'get out of jail free card'. 

As such it would be fair to assume that when a high net-worth individual offers a large sum of money to buy citizenship, the member state would ask some basic questions of where the money came from and what they intend to do with this citizenship. 

But we have serious concerns that many European countries operating these schemes are blinded by the prospect of investment and are failing to properly look into applicants or their wealth. 

Cyprus boasts one of the  most lucrative and prolific golden visa regimes in Europe having sold passports to over 3,000 foreign nationals since 2013 garnering more than €6bn.

In 2017, British daily The Guardian reported on a leak of the names of people who had applied for Cyprus' citizenship-by-investment programme.

The list was a veritable who's who of the super-rich of Russia, Ukraine, China, Saudi Arabia, and Iran. 

And, at the very same time as the questionable decisions of the Cypriot government were being exposed, a host of elite figures connected to Hun Sen, the Cambodian prime minister, were applying to buy passports from Cyprus, as the investigation from Reuters has shown.

This includes the prime minister's niece Hun Kimleng and her chief of police husband, Neth Savoeun, as well as their two adult children.

Hun Sen himself has been in power since 1985, ruling Cambodia with an iron fist throughout.

Last year, international NGO Human Rights Watch named Neth Savoeun as one of 12 generals who form "the backbone of an abusive and authoritarian political regime."

And whilst Cyprus has been rolling out the red carpet for Kimleng and Savoeun, the US state department put them on a visa blacklist for "undermining democracy", according to the Reuters news agency.

Others who sought European citizenship via Cyprus were Choeung Sopheap and her husband, Lao Meng Khin. This couple control Pheapimex, one of Cambodia's most powerful companies which - as our extensive iinvestigations have shown - has been responsible for illegal logging operations that have destroyed Cambodia's tropical forests.

They are also implicated in land grabs that have displaced thousands of ordinary Cambodians. 

While the couple rarely, if ever, feel the need to justify their companies' trail of destruction, Hun Sen has sought to rebut criticisms of Pheapimex, raising questions as to whose interests the conglomerate really represents.

Red flags

A simple Google search of any of these names would have thrown up immediate red flags.

It raises the question not of whether the due diligence was good enough, instead whether it was carried out at all. 

Corrupt elites illegally destroying forests with impunity is a common feature of the rampant environmental destruction that Global Witness has documented over the years.

But the sale of EU citizenship by Cyprus would represent a new low.

If Cyprus accepted their money it accepted profits made from destruction of Cambodia's rainforests and the displacement of Cambodia's citizens and in return gave the likes of Choeung Sopheap and Lao Meng Khin the gift of European citizenship.

At the start of December the EU's Finance Ministers will meet to discuss the EU's priorities in the fight against money laundering.

This is the perfect opportunity to finally slam the golden gates exploited by criminals and the corrupt into Europe and phase out the sale of citizenship- and residency-by-investment.