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5th Dec 2022

Ban on golden passports seen gaining ground amid Russia war

  • Malta is one of the three EU countries that run an investment for citozeship programs that MEPs argue should be phased out (Photo: Neil Howard)
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The European Parliament is expected to call for an EU-level ban on so-called golden passport programs by 2025, and to introduce stricter rules for golden visas, as scrutiny falls on member states where Russian oligarchs obtain EU residency or passports.

The schemes, under which non-EU nationals can get nationality and residency rights in exchange for financial investment, are "objectionable from an ethical, legal and economic point of view, and pose several serious security risks," says a report put together by Dutch liberal MEP Sophie in 't Veld.

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The report also finds that such schemes "pose several serious security risks for Union citizens," stemming from, among other factors, corruption and money-laundering.

In total some 12 EU countries have residency-for-investment programs, with different rules, little scrutiny or transparency and very little oversight from the EU authorities. Three member states give citizenship for investments: Cyprus, Malta and Bulgaria.

Despite widespread queasiness over the schemes, the EU has so far been mostly ineffective against them since nationality and residency are competences belonging to member states.

"We have to be clear, the investor citizenship and residency schemes are designed for shady business, they are not designed for regular investments, and member states have been facilitating this," in 't Veld told EUobserver before lawmakers started to debate the report on Monday (7 March).

MEPs will vote on the report on Wednesday.

Bulgaria has already made proposals to scrap its scheme. Two years ago the EU commission began probing schemes in Cyprus and Malta. In the case of Cyprus, it is currently only processing applications submitted prior to November 2020.

But In 't Veld, the lawmaker, said the commission's efforts so far were only "half-hearted attempts" to tackle the issue that had included setting up a working group made up of member states that "did nothing."

Balls needed

"The commission should finally wake up and have the balls to put a proposal on the table, and not wait for the blessing of member states," in 't Veld said.

The lawmaker's report calls for the commission to act against such schemes by the end of the year or face a legal obligation to explain its reasoning.

In January, Portugal opened an inquiry into Russian billionaire Roman Abramovich's successful bid to become a Portuguese citizen. The probe was triggered amid criticism that the law offering naturalisation to descendants of Sephardic Jews was being used by oligarchs to get a foothold in the EU.

At least 130,000 individuals have taken advantage of the investor citizenship and residency programs in the EU between 2011 and 2019, according to the European Parliament.

The schemes have generated around €21.8bn in revenue for the countries concerned.

In the wake of Russia's invasion, MEPs have added a new proposal that would ban all new applications from Russians immediately and that would require member states to reassess all decisions granting visas and citizenship under the schemes.

"We must ban the sale of EU passports and stop the flow of Russia's dirty money into the EU," centre-right Slovak MEP Vladimir Bilčík said in a statement.

Russian banks, oil refineries to face EU freeze

Russian banks and oil refineries to be hobbled by new EU sanctions, as civilian deaths mount in Ukraine. US wanted to exclude Russia from SWIFT, but Germany and France favoured incremental approach.

'Golden Passports': Malta takes 67 days to respond to EU

The European Commission exchanged 24 letters with Bulgaria, Cyprus and Malta over their 'Golden Passports' schemes between October 2019 and October 2020. Malta took 67 days to respond to the commission's first letter, followed by Cyprus (42) then Bulgaria.

Portugal was poised to scrap 'Golden Visas' - why didn't it?

Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic. But unlike common practice in other EU states with similar programmes, Portugal has not implemented "due diligence".

Portugal was poised to scrap 'Golden Visas' - why didn't it?

Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic. But unlike common practice in other EU states with similar programmes, Portugal has not implemented "due diligence".

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