Cyprus mired in new ‘passports for cash’ expose

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Cyprus said it would look into new allegations it sold passports to criminals but has denied any wrongdoing after incriminating evidence was published by global media outlet Al Jazeera.

Nicosia has refuted fresh claims that it granted citizenship to dubious foreigners in exchange for millions in investments, insisting that all those who received a passport met all criteria in place at the time.

Parliament has tightened procedures and eligibility criteria for the maligned “golden passport” investment programme, which has yielded over €7 bln in revenue since 2013.

The passport has attracted many Russian and Chinese investors because a Cyprus passport automatically grants its holder citizenship to the entire 27-member European Union.

“It is well known that the Republic of Cyprus has made successive changes to improve the Cyprus Investment Program, following the recent vote, of Regulations by the House of Representatives.

The most important change is that the regulations ensure transparency, credibility and continuous control, both before submitting an application and after obtaining a Cyprus passport,” said an Interior Ministry statement.

The Interior Ministry said 12 foreigners named in an Al Jazeera report received citizenship under the investment scheme only after being approved by Cypriot and international agencies tasked with vetting such applications.

“We wish to clarify that all the individuals mentioned, especially in the Al Jazeera report, were evaluated according to the criteria that were in force at the given time and which they met,” said the statement.

It added: “We are already checking and will continue to check all the information that has been made public.”

Qatar’s Al Jazeera report claimed that the 12 – including four Russians, two people each from Ukraine, China and Iran, and one from Venezuela and Vietnam – secured Cypriot passports after paying at least €2 mln in investments despite being under investigation for corruption and fraud.

Under the recent changes, new anti-money laundering rules will be used to bolster how prospective investors are vetted.

It is also easier for investors involved or convicted of a serious crime to have their Cypriot citizenship revoked.

There is also a wider choice on how investors can contribute to the Cypriot economy, including buying up stock in local companies or contributing to housing and entrepreneurship ventures.

Investors also have to pay a €150,000 application fee with the money earmarked for housing and innovation schemes.

The number of passport applications is now capped at 700 a year.

Due to the COVID pandemic and tighter criteria, there are only expected to be around 200 applications in 2020.

Last year, Nicosia did agree to revoke the citizenship of 26 investors from countries including Russia, Cambodia, Malaysia and Iran following accusations of wrongdoing.

President Nicos Anastasiades has acknowledged that mistakes may have been made at the time in granting passports.

Some 4,000 Cypriot passports have been issued to investors since the scheme was ramped up in 2013 to help Cyprus survive the bailout crisis.

Cyprus offers an EU passport for an investment of at least €2 mln and purchase of a €500,000 residence plus tax.

It is one of the few member states to offer an EU passport for investment.

Brussels has told member states to tighten checks on non-EU nationals seeking passports via investments.

It is concerned that “cash for passports” may be a backdoor into the EU for criminal gangs or government officials to launder huge sums or evade tax.

Cyprus has since upgraded its due diligence processes for buffer it against such criticism.