European Commissioner for Justice, Didier Reynders has said he is looking at the possibility of legal action against EU Member State Cyprus due to its citizenship-by-investment scheme.
The scheme, otherwise known as ‘cash-for-passports’ allows wealthy third-country individuals to acquire a Cypriot passport in exchange for investments and ‘donations’ to the country. They are controversial due to multiple instances where individuals with criminal records or ongoing criminal issues including charges of fraud, embezzlement, and money laundering have been given passports
Henley & Partners, a concessionaire for the scheme, was also linked to the now-defunct Cambridge Analytica.
Reynders called for changes to the schemes that are prevalent in some EU countries including Cyprus and said he preferred to phase them out completely.
Investigations by The Shift News, Al Jazeera, and Enquete Exclusive found that member states were issuing passports to fugitives, criminals, and those at high risk of corruption. In many cases, it appears that basic due diligence was not carried out, or the results were ignored. In Malta, it’s alleged that senior political officials received kickbacks on the sale of passports to certain individuals.
International anti-corruption NGO, Transparency International welcomed the suggestions from Reynders and encouraged the EU to act quickly.
“The Cyprus Papers show that it’s not just about a few bad apples and the occasional lapses of judgement. This is a systemic problem. The only way forward is for Cyprus to suspend the scheme, revoke the passports in question, and open investigations to establish accountabilities for the apparent abuse,” Laure Brillaud, Transparency’s senior policy officer, told Al Jazeera.
Previously, a damning draft report from the EU commission was due to be published making a list of recommendations for clamping down on the schemes. The final draft, however, had been heavily edited leading to concerns that passport concessionaires had lobbied hard to save their industry.
In December 2019, Exit News revealed that Albanian Prime Minister Edi Rama appeared at a Henley & Partners event in London. He said that Albania was ready to start selling passports in exchange for investment and that he felt it was right for the country and that he would continue even though he expected pushback from the EU.
The European Commission and the EU Delegation in Tirana did not come out in support of the plan and since then, Rama’s plans seem to have come to a halt.
