After 13 years, Cyprus is scrapping its maligned Cypriot citizenship scheme for foreign investors next month as it is no longer fit for purpose.
Cypriot government spokesman Kyriacos Koushos made the announcement after an emergency cabinet meeting to discuss the passport for investment programme.
He said the scheme will end in its current guise after the ministers of finance and interior, proposed it be abolished.
“The proposal of the two ministers was based on longstanding weaknesses, abuse and exploitation of the provisions of the investment programme,” Kousios told reporters.
He said the scheme – which has generated 7 bln euros – would end on November 1, 2020.
Koushos said the government will now “fully examine its policy to encourage investment” after the completion of an on-going investigation into the so-called ‘golden passports’ scheme.
He said there were no plans yet to replace it.
This surprise decision comes after new revelations from Qatar-based broadcaster Al Jazeera that captured officials on camera allegedly trying to help a client with a criminal record acquire a Cyprus passport.
“Posing as representatives of a fictitious criminal character, our undercover reporters were ushered through the application process for the Cyprus Investment Programme by lawyers, property agents, leading eventually to high ranking politicians,” Al Jazeera said in a statement on Monday.
Those involved – a Cypriot MP and the parliamentary speaker – deny any wrongdoing.
Parliamentary speaker Demetris Syllouris said Tuesday he was standing down from office until a police investigation in the Al Jazeera claims are complete
Cyprus began offering citizenship in exchange for substantial investment as far back as 2007, but the scheme was stepped up following the Mediterranean island’s 2013 economic crisis.
But Nicosia has faced pressure from Brussels to reform the scheme over concerns it may have helped organised crime gangs infiltrate the European Union.
Last month, Al Jazeera reported that dozens of those who applied for the so-called “golden passports” were under criminal investigation or international sanctions, or serving prison sentences.
Cyprus had tightened rules since 2007, including banning cash payments in 2014.
Currently, the government grants a passport in exchange for an investment of 2.5 million euros ($3 million).
Even before Al Jazeera published its story, some 30 people had been referred for investigation to a special committee.
Last week, Nicosia said it was revoking seven passports for ‘false representation’ by investors on their application.
The country is re-examining the cases of all roughly 4,000 people who successfully applied for a Cypriot passport under the investment scheme.
Cyprus is one of the few EU members that offers a passport for investment rather than residency status.