The EU has removed the toughest measures and recommendations from a report on golden visas that was published in January, non-profit media organization Organized Crime and Corruption Reporting Project (OCCRP) reported.
The European Commission warned that programmes of EU states, including Cyprus, to sell passports and visas to wealthy foreigners could help organised crime groups infiltrate the bloc and raise the risk of money laundering, corruption and tax evasion.
The warning is contained in the first report the EU executive has produced over the multi-billion-dollar industry of so-called “investment migration”, which allows rich individuals to buy citizenship or residence in countries that put them on sale.
It highlighted shortfalls in the Cypriot and Maltese schemes which do not sufficiently check the origins of wealth of individuals and do not allow their easy identification.
Although legal, these schemes are sometimes run in opaque ways and without sufficient checks on those who acquire passports and visas, the commission said, mostly raising concerns about the programmes in Malta and Cyprus.
However, according to OCCRP, the EU had removed some of its toughest measures and recommendations ahead of the document’s public release.
This included the omission of a demand that “Member States should not accept investor scheme applications from persons listed on UN and EU sanctions lists.”
Since passports and visas are usually sold through commercial partners, the EU’s published report raised concerns about the conflict of interest that arises when private companies both “advise the governments on operating the scheme…yet at the same time also advise individuals on their applications to the scheme.”
Despite its concerns, the Commission removed all recommendations on how to counteract such conflicts of interest, the organisation said.
The October draft said: “Intermediaries involved in the handling of applications should not have any decision-making power or screening duties, tasks which should be reserved for government authorities.”
“They should make publicly available information about those intermediaries and the procedure for selecting them.”
These calls for action became requests for “clarity in procedures and in responsibilities,” the OCCRP said.
MEPs including have urged Brussels to investigate the possibility of legislative action to stem golden visas.
“I called the Commission and asked them, ‘Have you made a detailed analysis about the possibility of using EU law in order to at least set limits to these schemes?’ They were really evasive whether there was such a legal analysis,” Sven Giegold said.
October’s draft report suggests the EU did in fact take this into consideration.
“Whether such legislation and practice, which permit third-country nationals to obtain national citizenship, and hence citizenship of the Union, without requiring any genuine connection to the country, are compatible with Union law is being questioned. [A concern which is shared by the Commision],” the draft read.
This clause was removed prior to publication.
The Commission declined to comment on the leaked draft, and it is unclear why some of its toughest demands were removed.
EU officials previously claimed they wished to avoid conflict between Brussels and member states ahead of European elections in May.