Prime Minister Edi Rama has announced at the Global Citizenship Conference in London that Albania will be selling its citizenship through a controversial and “fantastically corrupt” program designed by citizenship advisory Henley and Partners.
During his speech, Rama said, “I know there are controversies around this program,” adding, “I know that when I get back home I will receive an alert from the European Union about this, but I strongly believe this is what we have to do.”
During Rama’s speech he joked that “once upon a time we were proud to be the only country in the world not to allow anyone to enter or to get out” and made several jokes about communism and various dictators. He claimed that Albania has the highest growth in the region and that despite it being “risky” it is something that “we have to do.”
There are risks, but in the name of risks we cannot deny to our country, the enormous potential of the program.
Those purchasing Albanian citizenship will receive a “tax holiday” for 10 years, a 6% VAT rate, and “many other tax benefits”, according to Rama.
One of the underlying motivations for the proposed cash-for-passport scheme appears to be the collapse of Foreign Direct Investment in Albania.
Another PPP
The money paid for the Albanian passport will be split between the government and Henley and Partners, in what appears to be yet another public–private partnership. In Malta, Henley and Partners receive 4% of the fee paid to the government and 4% of any investments made by the applicant as a part of the application process. An invoice issued with the Henley and Partners logo, seen by Exit, for “sales tax” on the purchase of a EUR 5 million home in Cyprus, shows that they took a 13% commission there, so how much they would profit from the sale of Albanian passports could vary.
European Criticism
The European Commission is strongly critical of such programs, which “create a range of risks for Member States and the Union, in particular security risks, risks of money laundering, and corruption and tax evasion.” Věra Jourová, the EC Commissioner for Justice made it clear that “the European Commission does not endorse cash-for-passports.”
In terms of third countries, such as Albania, that have a visa-free regime with the EU, the Commission warns that cash-for-passport schemes can allow nationals to “circumvent the regular Schengen visa procedure and in-depth assessment of individual migratory and security risks.” The Commission adds that any country wishing to join the EU that offers a cash-for-passports scheme will be monitored as a part of their accession process, with particular attention to “money laundering, terrorist financing, corruption, and infiltration or organised crime.”
Opening a cash-for-passport scheme may pose an additional risk to Albania’s visa liberalization scheme with the Schengen area, which recently came under fire in the Dutch parliament.
Also European Parliament spoke out against cash-for-passport schemes, recommended that they be phased out because they “carry significant risks” including corruption, money laundering, and tax evasion. MEP Frank Engel called them “the practices of a banana republic” and MEP Robert Zile said they were being used to “defy sanctions imposed on Russia by Europe”. MEP Roberta Metsola added that “however the big lobby tries to sell it, selling citizenship has nothing to do with investment. I have always pushed for bona fide investment, but passport sales is not that.”
MONEYVAL, the anti-money laundering arm of the Council of Europe called for those states operating such schemes to tighten procedures due to instances of money laundering. It also criticized Malta’s cash-for-passport scheme, saying that “the risks associated with the program are perceived to be high.”
Scandals in Malta, Cyprus, Bulgaria, and Moldova
In Malta, a total of five “new” citizens have been either arrested or pleaded guilty to crimes including embezzlement, fraud, and money laundering. They include Mustafa Abdel Wadood (facing 125 years in prison for fraud, pleaded guilty), Boris Mints (Russian oligarch charged in the UK with fraud), Liu Zhongtian (indicted in US for evading $1.8 billion in Aluminium tariffs), Pavel Melnikov (Russian billionaire investigated for financial crime in Finland), and Anatoly Hurgin (Russian/Israeli owner of WhatsApp hacking firm charged with money laundering, smuggling, fraud, and various other crimes). Many of these were under investigation or litigation pending at the time of application.
In Cyprus the infamous fugitive billionaire Jho Low was given Cypriot citizenship whilst he was considered a risk, and he is now on the run from a number of different governments for embezzling funds to the tune of potentially billions.
It was also alleged that Maltese politician Keith Schembri had received kickbacks on the sale of passports, and in Bulgaria the so-called “passport-for-bribes” scam received widespread condemnation. The Moldovan authorities cancelled their scheme shortly after launch due to “questions about the companies that are involved in the program”. Allegations have also surfaced in Cyprus about alleged bribes and kickbacks paid to the government and church leaders.
The most popular nationalities that buy passports through these schemes are Russian, Chinese and individuals from the Middle East including Saudi Arabia, Bahrain, Iran.
