Ban on golden passports seen gaining ground amid Russia war

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.