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House releases funds for tougher checks on passport buyers

The House finance committee on Monday released €1.4m that will be used to hire a specialised firm to carry out enhanced due diligence on people who apply for Cypriot citizenship as part of the island’s investment programme.

Cyprus has been heavily criticised over its citizenship-by-investment programme, which the EU said lacked transparency and posed a money laundering risk.

House finance committee chairman Angelos Votsis said hiring a firm to carry out enhanced due diligence would allay concerns and enable Cyprus to respond to accusations aimed at ruining the island’s reputation abroad.

Cyprus acknowledged the existence of problematic cases and unveiled a set of reforms in August last year.

The reforms doubled the length of time for assessing applications and introduced an annual cap of 700 on the number of passports for sale.

Also, private sector agents are now accredited by and answerable to a Supervision and Control Committee.

The agents are listed on a public register and are obliged to abide by a code of conduct that requires them to submit a “report of the findings of due diligence review” for every individual they support for citizenship.

In January, 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.

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.


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