The EU will launch legal action against Cyprus and Malta over their controversial “golden passport” schemes for foreign investors amid allegations they were exploited by criminals.
After an Al Jazeera undercover sting, Cyprus said last week it would scrap its investor programme, which has generated €7 bln, on November 1.
Reporters caught senior officials on camera apparently agreeing to facilitate a Cyprus passport for a fictitious Chinese investor with a criminal record.
European Commission vice-president Maros Sefcovic said that “infringement procedures” would be launched against the two countries on Tuesday.
“It’s very important to underline the fact that the commission has frequently raised its serious concerns about those schemes with the member states concerned, and the latest developments only reaffirm those concerns,” Sefcovic told reporters.
“We will continue our intensive contacts with both Cyprus and Malta to make sure European law in this area would be properly respected.”
Sefcovic said more details of the legal action would be announced once it is launched on Tuesday.
Cyprus and Malta are among the few countries that offer an EU passport for investment.
Foreign investors could acquire a Cypriot passport with an investment of €2.5 mln but the government is now scrapping it due to “abuse of the system”.
An independent committee of inquiry is reviewing some 4,000 applicants who received a passport since its inception in 2007.
Nicosia has said it will revoke seven passport due to ‘false representation’ by the applicants.
Following the Al Jazeera broadcast last week, Parliamentary Speaker Demetris Syllouris resigned as did AKEL MP Christakis Giovannis after they were featured in the ‘gotcha’ video.
There was also an anti-corruption protest held in Nicosia while a police investigation was launched.
In August, Al-Jazeera reported that dozens of investors who had applied for Cyprus passports were under criminal investigation, international sanctions or serving prison sentences.
Malta, which started selling passports to wealthy foreigners in 2014, last month arrested former prime minister Joseph Muscat’s chief of staff as part of a probe into alleged kickbacks connected to its own golden passport scheme.
