CYPRUS: EU to warn Nicosia that \’golden visas\’ help organised crime

Brussels will issue a warning against Cyprus, Malta and Bulgaria saying their citizenship for investment schemes could help foreign organised crime gangs infiltrate the bloc and increase the risk of money laundering, corruption and tax evasion.

The warnings are included in a draft report, seen by Reuters, that is expected to be published on Wednesday by the European Union’s executive.

Although individuals who purchase citizenship and residence in EU states can do it for legitimate reasons, the commission said the schemes posed “risks of infiltration of non-EU organized crime groups in the economy, money laundering, corruption and tax evasion.”

Malta, Cyprus and Bulgaria are the only members of the 28-member bloc which run schemes selling citizenship, while twenty states, including those three, sell residence permits.

In the three states wealthy foreigners can buy passports, which grant them unhindered access to most EU countries, for investments ranging between around €1 mln – €2 mln.

Reuters said the EU report flags shortfalls among all three in checking the origins of wealth of individuals who purchased their citizenship. The countries also did not allow easy identification of those who bought their passports.

They also circumvented EU rules that require “effective” residence in an EU state before granting citizenship.

The Commission said that EU states’ programmes to sell national residence to foreigners posed similar risks as citizenship schemes.

Twenty EU states currently sell residence permits to foreign citizens. Residence is sold against investments that range between less than €15,000 in Croatia to over €5 million in Luxembourg and Slovakia, the report said.

Cyprus has long denied it sells EU passports and has recently tightened its procedures for its investment scheme.