The saga of Cyprus’ defunct Citizenship for Investment scheme is again on the House agenda, following the Auditor General’s report that €220 mln was lost due to a possible criminal lack of oversight.
The passports for cash scheme was “rotten until the end”, said Auditor General Odysseas Michaelides, arguing that several questionable actions of government officials could constitute criminal acts.
MPs of the House Audit Committee will dive into the report after opposition AKEL MP Irene Charalambides called for an extraordinary meeting on Thursday.
In comments to state radio CyBC, Charalambides said parliament could not turn a blind eye to the serious accusations made in the reports.
She noted the Auditor General points to mishaps carried out by government officials, including ministers and heads of departments.
“It is the House’s responsibility to demand accountability from authorities for their actions,” said Charalambides.
The MP accused the acting Tax Commissioner of presenting misleading information to the parliament on passports given to foreign investors.
Ruling party DISY is reluctant to discuss the latest chapter of the golden passports scheme, with its MP Savvia Orphanidou telling CyBC the House has exhausted the matter.
“Even if the report does include some new evidence, it doesn’t add anything new to what has already been discussed publicly,” argued Orphanidou.
She referred to some mistakes and omissions, emphasising loopholes in the legislation that some astute people took advantage of.
Releasing an almost 200-page dossier of a probe into 3,517 cases of foreign investors who acquired citizenship through the golden passport scheme, the Audit Office said that actions by officials, including the cabinet, deprived the state of serious revenue.
Abuse of power
The report’s main conclusion is that many people who used the scheme did not meet the criteria, with evidence of possible abuse of power by government officials.
It said: “The potential abuse of power and/or the potential commission of criminal offences by persons who exercised public authority is not limited to the astute ones who abused the Cyprus Investment Programme, taking advantage of its loopholes, shortcomings and weaknesses.”
At least 3,810 additional people were naturalised as spouses, adult dependent children, or parents of the investors without any legal authorisation, according to the report.
It said officials at the Interior Ministry concealed information from the cabinet and the House of Representatives regarding applications.
And then, Interior Minister Constantinos Petrides failed to attach the memos he received from the interior and finance ministries on many applications when presenting the proposal to the cabinet.
The Audit Office said mishandling by the cabinet cost millions in public funds “from the illegal use of the reduced VAT rate and the illegal naturalisation of the thousands who were given Cypriot citizenship as members of the investors’ families, without these persons making any investment”.
An estimated €200 mln was lost from VAT and another €25 mln from uncollected fees.
During its lifespan, the passports for cash project generated over €8 bln for the state, with the scheme linked to property development.
€1 bln worth of contracts for residential properties were cancelled due to the scheme’s demise in 2020, while sales contracts worth €3.5 bln are still pending, with the report observing that no satisfactory mechanisms were ever in place to prevent the likelihood of fake investments or their premature abandonment.