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CYPRUS: NGOs say Golden Visa schemes pose money laundering risks

10 October, 2018

Schemes run by EU countries like Cyprus offering passports and residency permits to wealthy foreign citizens pose risks of money laundering as some of the programmes are not properly managed, campaign groups argue.


 Reuters said government schemes to trade citizenship or residence rights for large investment are currently applied in 13 EU countries: Austria, Cyprus, Luxembourg, Malta, Greece, Latvia, Portugal, Spain, Ireland, Britain, Bulgaria, the Netherlands and France. Hungary has terminated its programme.

“If you have a lot of money that you acquired through dubious means, securing a new place to call home far away from the place you stole from isn’t just appealing, it’s sensible,” Naomi Hirst of rights group Global Witness said.

She said checks on individuals that bought EU citizenship or residency permits were not satisfactory and exposed countries to corruption and money laundering risks.

The joint report by Global Witness and Transparency International urged Brussels to set standards for managing the schemes and to extend anti-money laundering rules, applied so far to banks or gaming firms, to all those involved in the visa-for-sale industry.

The European Commission is expected to publish a report on schemes in EU countries by December, an EU official said.

Acquiring these documents costs on average €900,000, but Cyprus’ passport could cost up to €2 mln, the report said.

Cyprus has raised €4.8 bln from its scheme, while Portugal could earn nearly a billion euros a year, according to figures cited in the report, called “European Getaway – Inside the Murky World of Golden Visas”.

EU states generated around €25 bln in foreign direct investment in a decade from selling at least 6,000 passports and nearly 100,000 residency permits, the report said using what it called conservative estimates.

“Cyprus, Portugal, Spain and the UK appear to earn between half a billion and close to a billion euros per year,” said the report.

“Despite the large amounts of money involved, Cyprus and Portugal do not seem to question applicants’ source of wealth,” it added.

Nicosia says it has tightened its procedures for its citizenship for investment scheme while refuting it is tantamount to selling off Cyprus passports.

The report said in Malta, which has raised €718 mln from its scheme, applicants who have criminal records or are under investigation could still be considered eligible “in special circumstances”. 

“Poorly managed schemes allow corrupt individuals to work and travel unhindered throughout the EU and undermine our collective security,” Laure Brillaud, anti-money laundering expert at Transparency International, said. 

All the countries who run these schemes, except Britain, Cyprus, Ireland and Bulgaria, are part of the Schengen free-movement area which comprises 26 European states.

RELATED LINK www.globalwitness.org/en/press-releases/eu-member-states-race-bottom-sell-golden-visas-super-rich/