CYPRUS did not emerge from the report on golden visas carried out by Global Witness and Transparency International smelling of roses. On the contrary, the report, titled European Getaway – Inside the Murky World of Golden Visas, said Cyprus’ citizenship-by-investment scheme posed the risk of “exposing the EU to the corrupt and the criminal.” It dismissed the recent reviews and changes to the scheme announced by the government as cosmetic while declaring “Cyprus’ passports for sale scheme is the most prolific of its kind in Europe, with 3,300 foreign nationals having secured EU passports since 2013.”
Cyprus, Malta and Portugal were given special mention for their lack of rigour in examining applications, the report saying there was “insufficient due diligence, wide discretionary powers and conflicts of interest.” It said: “Specifically, we found that Cyprus and Portugal, in spite of recent reviews and changes in their programmes, do not seem to take into account an applicant’s source of funds or wealth when analysing applications.” In May 2018 it was said the government would bring in agencies that specialise in identifying money laundering to review applications, but the report noted there was no confirmation the government would conduct its own due diligence checks.
Predictably, the government is only interested in creating the impression that its citizenship-by-investment scheme was not a free-for-all (with funds), even though it was marketed as “the quickest most assured route to citizenship of a European country.” Calls for transparency – naming every individual who was granted citizenship – was flatly rejected with the government claiming, rather unconvincingly, that it would violate personal data. Yet it is standard practice for the names of foreigners that have been granted citizenship – not through the scheme for the rich – to be published in the official gazette. The other argument used, that some people might not want it known they were granted Cyprus citizenship, raised many suspicions about the scheme.
Citizenship schemes are applied in 13 EU member states including big countries such as France, Britain and Spain. This has always been Cyprus’ defence whenever the scheme is brought up, even though it does not answer the question of why the government does not carry out due diligence checks or make public the names of new Cyprus citizens. The only criterion is that an applicant makes a €2m investment, which usually consists of buying an overpriced property, and has no criminal record, documentation for which is very easy to obtain in many countries.
There is one salient point that was not mentioned in the report and sets Cyprus apart from the rest of the 12 EU member states. The family of our head of state reaps great financial benefits from this scheme, the Nicos Anastasiades law office processing a very large number of applications while companies linked to the family arrange investments for the applicants. It is a very good advertisement for a law office, dealing with applications to the state, to belong to the family of the president. Even if he never picks up the phone to ask a favour for his family law firm’s clients, the mere mention of the firm’s name will ensure prompt, if not slavish, service from state officials. Applicants for citizenship would be aware of this.
Interestingly, when in late 2014 it was revealed that Ryanair, which had put in an offer for Cyprus Airways, was represented by the president’s law office Anastasiades made the following statement: “On taking over the presidency of the Republic, there was a clear agreement with my former partners that the law office, under the name Nicos Chr. Anastasiades and Partners, would not accept to represent anyone whose represented interests depended on government decisions.” This agreement does not seem to be valid in the case of applications for citizenship, because the law office does represent applicants that depend on government decisions.
This, probably, was what the report was alluding to writing about “wide discretionary powers and conflict of interest.” This being Cyprus, it is very difficult to believe that criteria are strictly adhered to when citizenship applications are examined. It is the reason Cyprus is red-flagged whenever there are reports about the golden visa schemes. When the president’s family business benefits financially from a state scheme, foreigners are always inclined to jump to certain unflattering conclusions that are implied rather than spelt out. They would think, perhaps wrongly, there was insufficient due diligence and lack of transparency because this benefited offices with government links.
The citizenship by investment scheme has earned Cyprus a staggering €4.3 billion, a sizeable portion of this during the recession when it was desperately needed, but the indiscriminate granting of visas, excusable in hard times, cannot be justified in current conditions, regardless of who benefits from it.