Petrides told enquiry he was never a fan of passport programme

Former interior minister Constantinos Petrides told an inquiry he had never been a fan of the island’s citizenship by investment programme, which ultimately overturned the excellent image Cyprus had built after 2013.

In his testimony before the panel, which took place on November 24 and was published on Tuesday, the current finance minister said the programme had inherent weaknesses and had created dependencies and vested interests.

Petrides said the bad practices and damning media reports relating to the programme had hurt Cyprus’ excellent image, which had been built through policies and hard work after the economic collapse in 2013.

The minister added however that the situation would be easier to change as it was not as bad as before 2013, but “certainly we have suffered a serious blow.”

The island’s credibility had been hurt mainly because the government had granted citizenships to dubious individuals and because of the perception that Cyprus was “selling passports,” Petrides said.

Selective naturalisations of investors would not even have raised any red flags with the EU, which has launched legal proceedings against Cyprus, he said.

The publicity the matter has gained abroad only added to the damage as serious institutional investors shunned the island.

Petrides said the problem was not the administrative shortcomings but the lack of criteria for high-risk individuals, the absence of due diligence tools, and the abuse of the programme by the “industry that was created”.

The minister conceded he had also been pressured by an MEP and an MP while in another instance someone had mediated to achieve naturalisation of a person who was later proven to be a casino owner in the north and involved in smuggling.

According to Petrides, the entire system was based on the fact that all the parties involved in the system would carry out due diligence based on the directives of the supervising authorities.

The biggest gap however was the absence of criteria relating to high-risk individuals. Petrides said individuals under prosecution in their countries had clean criminal records and were thus granted citizenships.

There was no provision regarding politically exposed persons, even if they came from countries linked with corruption and human rights abuses.

“These in my view were the most important gaps in the programme since the start,” he said.