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Briefing / 10 Oktober 2018

European Getaway: Inside the Murky World of Golden Visas

How mismanaged ‘Golden Visa’ schemes are enabling corruption on an unprecedented scale, and what EU institutions must do about it

Burgundy passports are turning gold, as EU governments sell residency and citizenship to the ultra-rich. By their nature, these schemes pose inherent risks for corruption, as people who steal money from their home countries need other jurisdictions to escape to when the going gets tough.  

Golden visa schemes offer fast-track citizenship and/or residency to foreign nationals in exchange for lots of cash. European golden visas are particularly appealing, as they give their owners free reign to move throughout the EU, unconstrained by interference or checks. 

There are numerous examples of high-risk business people and oligarchs enjoying all the benefits that golden visas have to offer. 

Read our blog 'Red Notice on Golden Visas' here 

Currently, four EU Member States sell passports and 12 trade with residency rights.  Given the inherent risks, these schemes ought to have the highest standards of due diligence checks so that countries know who they are welcoming in and where their money came from. Unfortunately, that is not what our joint investigation with Transparency International found. We discovered that risky individuals are buying access to the EU, and that these schemes are risking the corruption of the state itself as profit-hungry governments disregard the dangers and enter into a race to the bottom to attract hefty investments.

Read the full report ‘European Getaway’ here (PDF)

Finding safe haven through these schemes is simpler than you might think if you have a lot of money to spare. Despite the risks posed by golden visa schemes, several of the governments selling residency and citizenship do not seem to question where applicants’ money comes from. This perhaps contributes to the EU:

  • Welcoming over 6,000 new citizens and close to 100,000 new residents through golden visas schemes in the last decade.
  • Attracting around €25 billion in foreign direct investment through golden visas over the last ten years.

While some nations are profiting from the sales of golden visas, all EU citizens take the sizeable hit due to the ethical implications and risks embedded in the current practice. Nonetheless, secrecy continues to obscure even basic information about these schemes and EU citizens do not have the information necessary to decide whether selling residency or citizenship is a risk worth taking. 

We have worked with Transparency International to change this, investigating publicly available sources and reaching out to national governments for additional information. In our latest report, we are able to shine some light on the shady situation, revealing a telling though still incomplete picture of the golden visa scheme. 

Recommendations:

With Transparency International, we call upon EU institutions to: 

  • Set EU-wide standards for golden visa schemes, including enhanced due diligence and transparency;
  • Identify and regularly assess the risks posed by schemes for the EU as a whole and mitigate accordingly;
  • Seek to broaden anti-money laundering rules so they apply to all players in the golden visa industry;
  • Establish mechanisms for collecting and coordinating information on applications, investment and rejections;
  • Start legal proceedings against member states whose schemes could undermine the collective security of EU nations.

Download our Executive Summary to see a full list of our recommendations (PDF)