EU takes legal action against ‘golden passport’ schemes in Cyprus, Malta
22 Oct 2020

The European Union’s executive said on Tuesday it was launching legal action against Cyprus and Malta over their investor citizenship programmes, also known as “golden passport” schemes.

The schemes allow wealthy foreigners to buy citizenship in exchange for an investment of around 1 million euros in Malta and 2 million euros in Cyprus.

The European Commission said the decision was taken because the two member states granted nationality – and thereby EU citizenship – without requiring “a genuine link with the country”, as passport holders were not obliged to reside there.

The Commission also sent a letter to Bulgaria raising concerns about its passport-for-sale scheme, it said in a statement.

“There cannot be a weak link in EU efforts to curb corruption and money laundering,” Values and Transparency Commissioner Vera Jourova said.

Malta’s Finance Minister Edward Scicluna said on Tuesday the country was replacing its current scheme with a new programme that would introduce tighter vetting of applicants, who will have to be residents of the islands for a year before their applications can be considered.

The commission has refrained from launching legal actions against EU states that sell residence permits, also known as “golden visa schemes”, without requiring investors to stay in the country for a meaningful period, despite a European Parliament resolution urging such a move.

In a 2019 report the commission acknowledged golden visa and golden passport schemes posed similar money-laundering and organised crime risks.

Portugal, Greece and Bulgaria currently offer golden visa schemes under these lax conditions, a practice of which Latvia was pioneer in Europe.

Cyprus said last week it was suspending its citizenship-for-investment programme, ditching a scheme the government had acknowledged was open to abuse after an investigation by Al Jazeera, a media outlet.

By John Chalmers and Francesco Guarascio, Reuters, 20 October 2020

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