Press release / March 5, 2018

Murky world of Golden Visas puts EU at risk of corruption

The murky world of ‘golden visas’ puts the European Union at ‘huge risk of corruption’. These schemes, which run in 12 Member States, allow the rich and powerful to buy the right to reside in the EU or even become EU citizens. The potential for corruption is ‘significant’ with large sums of money changing hands in these ‘passport for sale’ schemes.

Today, investigations by the Organized Crime and Corruption Reporting Project (OCCRP) shine a new light on the Citizenship and Residency-by-Investment schemes offered by countries including Austria, Malta, Portugal and Hungary, revealing how they could be putting the EU ‘at risk of abuse’ from the criminal and the corrupt. 

Global Witness is calling on the European Commission to review the schemes and issue guidelines to Member States to prevent them from compromising EU security and values. 

Rachel Owens, Head of EU Advocacy, Global Witness said, ‘Golden visas put the EU at risk of abuse. For too long, the global super rich have waved their wallets and waltzed in. The European Commission must now show it’s serious about tackling the significant corruption risks associated with selling citizenship and residency to the highest bidder.’

Poorly run Citizenship- and Residency-by-Investment schemes make the EU a soft target for the wealthy corrupt. Weak vetting creates an open-door policy to criminals who are looking for a luxury lifestyle and a means to evade law enforcement and prosecution in their home country. Lax public oversight of the schemes means government officials are at risk of being bribed. 

Some 12 Member States now offer these schemes through which individuals and their families can gain residency status or fast-tracked citizenship if they have enough cash to buy into buildings, bonds or businesses. Once legal status is awarded in one Member State, these individuals can often roam freely throughout the EU – an attractive proposition for many applicants. 

Owens added, ‘The potential for corruption is huge. The questionable decisions made by these governments affect the rest of Europe. In selling freedom of movement to shady characters, they are putting the safety of other Member States at risk for their own profit. It’s clear that EU-wide action is needed to close the door on the corrupt who seek safe haven in Europe via these shoddy schemes.’

The European Commission will be publishing a report on these schemes later this year. Global Witness is calling on the Commission to take EU-wide action to tackle this abuse and to review the many corruption risks associated with selling residency and citizenship. 

To ensure the integrity of the EU single market and safeguard EU objectives of sincere cooperation, security, and justice, the Commission must – at minimum – commit to setting due diligence and transparency standards for these risky schemes.

The European Commission must:  

  • Scrutinise the money-laundering, bribery and corruption risks associated with all  Residency and Citizenship-by-Investment schemes operating in the EU 
  • Determine to what extent these schemes affect the integrity of the EU single market, undermine sincere cooperation between Member States and EU objectives concerning justice and security and based on that analysis take the appropriate EU-wide action.
  • Evaluate the efficacy of Member States due diligence procedures for prospective applicants and, at minimum, recommend best practice standards to ensure applicants are subject to the sharpest of checks and the schemes operate transparently and with stringent oversight. 

Global Witness's recommendations for best practice can be found below. 

/ ENDS

Notes to editor:

‘Residency-by-Investment’ schemes offer temporary or permanent residence in return for investment. Citizenship can often be acquired subsequently after varying periods of residency.  

‘Citizenship-by-Investment’ schemes offer citizenship immediately or very swiftly, i.e. a very short or no period of residency, in return for investment. 

‘Investor visa’ or ‘golden visa’ describes both schemes more generally. Sometimes the term ‘immigrant investor programme’ is used.

Austria, Bulgaria, Cyprus, France, Greece, Hungary, Ireland, Latvia, Malta, Netherlands, Portugal and the UK all offer golden visa schemes with investments ranging from €250,000 to €10m+. 

Each jurisdiction offers different investment options, criteria, and residency requirements:

  • In Cyprus you can attain citizenship within three months if you invest at least €2 million in the purchase, creation or participation in businesses or companies that are based and operating in the Republic and employ at least five Cypriot citizens.   
  • In Portugal €500,000 in property gives you permanent residency. After five years, it can be converted to citizenship, granting investors the right to live and work throughout Europe under EU rules. 
  • Under Malta’s scheme, individuals can obtain Maltese passports in return for a €650,000 contribution to the national development fund and the purchase or lease of property, as well as well as investments of at least €150,000 in stocks and bonds. Family members can be added for an additional fee of €25,000 to €50,000 per person. The main applicant for the citizenship must have legal residence status in Malta for a minimum period of one year.

For information on the upcoming European Commission review, refer to p14 of this report

Additional information can be found in this briefing

Global Witness is working in cooperation with the Global Anti-Corruption Consortium (GACC). More information about the GACC can be found here.

For more information or for interviews contact Jo Sullivan, Senior Communications Advisor - 00 32 474 349 458 / [email protected]

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