The government said on Tuesday it would be scrapping the citizenship by investment programme in its current form from November 1, as police launched an investigation following an undercover video implicating House president Demetris Syllouris and an MP.
The decision followed a damning report by Al Jazeera whose undercover journalists filmed Syllouris and Akel MP Christakis Giovanis appearing ready to help a Chinese businessman with a criminal record — who it later emerged was fictitious – secure a Cypriot passport.
Publication of the video on Monday led to Giovanis’ resignation while Syllouris said he would abstain from his duties despite calls for him to step down too.
Both claimed entrapment, saying they reported the case to the authorities in October last year, just days after the meeting with the fictitious representatives of the fictitious Chinese businessman.
In his resignation letter to the party, Giovanis insisted the entire affair was staged and designed to hurt Cyprus and the island’s citizenship by investment programme.
Syllouris said he would be abstaining from his duties from October 19 and until the completion of the investigation. He said he has made his decisions, which would be announced after the probe but did not say whether he would be resigning.
The government’s intention to scrap the programme was made by government spokesman Kyriacos Koushos following an extraordinary meeting of the cabinet on Tuesday morning.
“During today’s extraordinary meeting of the cabinet, the ministers of finance and interior submitted a proposal to scrap the current investment programme,” the spokesman said.
The proposal was prompted by the programme’s weaknesses but also the abuses of its provisions.
The decision will be effective from November 1.
European Commission spokesman Christian Wigand said Tuesday “we watched in disbelief how high-level officials were trading European citizenship for financial gains.”
“President von der Leyen was clear when saying that European values are not for sale,” he added.
“The Commission has frequently raised its serious concerns about investor citizenship schemes, also directly with the Cypriot authorities. The Commission is currently looking at compliance with EU law of the Cypriot scheme in view of possible infringement proceedings,” Wigand said.
“We are aware of the latest declarations of the government and expect the Cypriot competent authorities to thoroughly look into this case,” he added.
Attorney-general Giorgos Savvides said he had given police clear instructions to carry out a full and comprehensive investigation into the possibility of the commission of criminal offences.
In a statement, Savvides said the video caused “indignation, anger, and concern” among the public.
A probe by independent investigators headed by former supreme court judge Myron Nicolatos has already been launched following another Al Jazeera expose in August.
In that report, using leaked documents, the broadcaster suggested Cyprus had been granting citizenships to dubious individuals.
Koushos said the government will review its policy of attracting foreign investment following the completion of the investigation.
“The situation will be comprehensively examined but no decision has been made at present,” he said.
The spokesman declined comment on the latest Al Jazeera video.
Ruling Disy welcomed the government decision after the abuses that undermined its credibility.
The party said it will submit proposals for a more credible policy after the investigations.
Opposition Akel and Diko accused the government of scrapping a programme that was good for the economy because it could not stamp out corruption.
The Al Jazeera video was the latest installment in a series of damning reports relating to Cyprus’ ‘Golden Visa’ programme.
Several news outlets, including Reuters, have carried reports in the past two years on a scheme where thousands of foreign investors with deep pockets have leapfrogged over normally arduous citizenship processes, including for persons born on the island.
Criticised as opaque and fraught with the risk of money-laundering, the scheme is popular with Russians, Ukrainians and, more recently, Chinese and Cambodians.
Reuters reported in October 2019 that Cambodians close to long-time leader Hun Sen, plus family members, had acquired passports, leading authorities to review the programme.
Al Jazeera’s report in August this year said at least 60 individuals who acquired citizenship between 2017 and 2019 were high risk, and would probably not have qualified with new tighter rules since introduced.
At the time, authorities dismissed that report as “propaganda”, focusing instead on trying to find the whistleblower.
Monday’s report also features Famagusta lawyer Andreas Pittadjis, who is among the registered service providers of the island’s citizenship by investment programme.
The undercover reporters ended up having lunch at Giovanis’ house on October 26, 2019, along with Syllouris and the developer’s associates.
During the meeting, Syllouris suggested that if there was a problem in Cyprus “maybe we can go to another European country” offering his contacts with the heads of other, foreign, parliaments.
“So, I can do something in other countries. I know all the presidents of other parliaments,” Syllouris said, specifying Malta, Latvia, and Slovenia.
“If there is a problem, we’re not going to stop. We’re not going to abandon,” he said. “You can tell him that you have, without mentioning my name or anybody else, full support from Cyprus at any level; political, economy, society, anything.
Syllouris asked the reporter not to mention they met “because I have to protect my name as well.”