Service providers were the main problem of the citizenship by investment programme, a finance ministry official told an investigative committee on Friday.
Financial director Kyriacos Kakouris told the four-member panel that he considered “the way the programme was promoted by some people” as the problem. “The service providers and those who cooperated with them.”
Kakouris was appointed head of the department examining the financial criteria the interior ministry was conveying in 2016. At the same time, he was tasked with proposing new criteria, something which he did in June of that year.
The aim, he said, was to channel investments into more productive sectors of the economy, abolish bank deposits and investment in government bonds.
Towards the end of 2019, the cabinet asked that service providers submit information on whether the conditions of the programme had been met by their clients. The information concerned citizenships granted between May 2013 and December 2018.
The survey covered 882 investors, of whom 856 appeared to comply. Of the remaining 26, five had sold their investment, questions arose for three, and 12 had not fulfilled their investment plan.
The 12 had purchased a house and land to develop and have given various excuses for their failure including not being issued planning permits.
Three have since died and the checks were not completed for another three because the police seized the files as part of a probe.
Kakouris said they still had to check 300 applications filed before the scheme was terminated by the government in November, following damning media reports.
The finance ministry official the criteria did not specify who must transfer the money from abroad, something, which was fixed in August 2020.
His department considered the investor to be the person who filed the application at the interior ministry.
They were sent the application to examine the criteria, but it was not required of them to check who made the transfer,
Once the money was in a Cypriot bank, the criterion was considered as being met.