(Source: European Parliament, press release, 9 March 2022)

Ban ‘golden passports’…
Parliament stresses that ‘citizenship by investment’ (CBI) schemes, under which third country nationals obtain citizenship rights in exchange for a sum of money, undermine the essence of EU citizenship. Parliament describes the practice -in place in Malta, Bulgaria and Cyprus- as “free riding”, as member states sell what was never intended to become a commodity. Applications have been accepted even when requirements were not met, MEPs say, and demand that these schemes be phased out due to the risks they pose.

…and regulate ‘golden visas’
Noting the less severe risks posed by ‘residence by investment’ (RBI) schemes, Parliament asks for EU rules to help tackle money laundering, corruption, and tax evasion, including:

  • stringent background checks (also on applicants’ family members and on sources of funds), mandatory checks against EU databases, and vetting procedures in third countries;
  • reporting obligations for member states, including a “notification and consultation” scheme to allow other member states to object; and
  • requirements for minimum physical residence (for applicants) and active involvement, quality, added value, and contribution to the economy (for their investments).

No passports, nor visas for Russian oligarchs
Parliament welcomes the commitment by the relevant member states to limit the sale of citizenship to Russians with ties to the Russian government, and calls for all CBI and RBI schemes in the EU to exclude Russian applicants with immediate effect. MEPs urge EU governments to reassess all approved applications from the past few years and ensure that “no Russian individual with financial, business or other links to the Putin regime retains his or her citizenship and residency rights”. In addition, they call on the Commission to ban Russian nationals who are subject to EU sanctions from all RBI schemes.

A fragmented system and the role of intermediaries
MEPs deplore the lack of comprehensive security checks and vetting procedures in both types of schemes, adding that it should not be possible to file successive applications in different member states. Member states should not rely on checks carried out by non-state actors. Parliament calls for an EU levy of a meaningful percentage on the investments made – until ‘golden passports’ are phased out, and indefinitely for ‘golden visas’. It also asks the Commission to put pressure on third countries that benefit from visa-free travel to the EU to follow suit.
Noting that intermediaries in these schemes are neither transparent nor held accountable, Parliament calls for a ban on their involvement in CBIs and a “strict and binding regulation” for their role in RBIs, which should include sanctions.

Quote
Rapporteur Sophia in ‘t Veld (Renew, NL) commented: “These schemes only serve to provide a back door into the EU for shady individuals who cannot enter in broad daylight. It is time we closed that door, so that Russian oligarchs and other persons with dirty money stay out. Member state governments have refused to address the problem, claiming it was not an EU matter. Given what is currently happening, they cannot duck this issue anymore.”

Next steps
The Commission has to prepare a legislative proposal or justify its decision not to do so.

Background
At least 130 000 persons benefitted from CBI/RBI schemes in the EU from 2011 to 2019, generating revenues of over €21.8 billion for the countries concerned. CBI schemes exist in Malta, Bulgaria (where the government has tabled a draft law to end the scheme) and Cyprus (which is only processing applications submitted prior to November 2020, all of which have already been examined, according to the Cypriot government). Twelve member states have RBI schemes based on diverging amounts and options of investment.


Featured image: via Freepik