Passport scheme in the spotlight again after audit boss claims new irregularity

The government granted citizenships to 221 foreign investors without applying regulations passed by parliament in August 2020, MPs heard on Thursday.

According to the auditor-general, between August 2020 and February 2021, the government granted 221 citizenships without applying the new regulations, which provided for the payment of a special contribution of €200,000 by investors to certain public organisations.

Odysseas Michaelides told the House watchdog committee that the last naturalisation took place in February this year.

“What we found is that the cabinet continued to process applications submitted before the approval of the regulations … six months after they were passed, as if they did not exist,” Michaelides said.

Investors who applied before May 2019 did not have to pay anything while the new regulations provided for a €100,000 contribution to the land development organisation and €100,000 to one or two other foundations.

“All these naturalisations took place as if the regulations had not been passed,” Michaelides said.

In November 2020, when the government terminated the citizenship by investment programme, the interior ministry had said there were 1,513 pending applications.

Michaelides said the ministry received a legal opinion from Attorney-general Giorgos Savvides that said it could continue to approve applications based on the previous regime for six months after the approval of the regulations.

“The interior ministry received an opinion from Attorney-general Giorgos Savvides on March 5, 2021, but the citizenships we are referring to were already granted,” Michaelides said.

The auditor added that during discussion of the matter late June or early July 2020, the Legal Service had said that the new regulation would be enforced when it is voted.

The 2019 law on the matter clearly stated that until the new regulations were passed the government would apply the cabinet decisions.

Diko chairman Nicolas Papadopoulos accused the government of flouting the parliament’s decision.

He said three days after the regulations were approved and published in the Government Gazette, the cabinet approved five applications linked with the Ayia Napa marina, “illegally without applying the regulations passed by parliament. The (service) provider in these citizenships was the Nicos Anastasiades law firm.”

Papadopoulos said the government approved the citizenships despite them not meeting the financial criteria and at a time when parliament had taken away its discretionary power to do so based on public interest.

He accused the government of concocting a legal opinion to continue to flout the regulations and issued passports without the investors paying €200,000.

“It is noted that when the Legal Service came before parliament and the interior committee during the discussion of the regulations, it explicitly stated that with the passage of the regulations a new legal regime would be implemented in the approval of citizenships,” Papadopoulos said.

“In other words, to cover the violation, to cover the Nicos Anastasiades law firm, to cover the president himself and the blatant offence in the particular naturalisations, the attorney-general came up with the exact opposite legal opinion from the one he gave when he was trying to convince parliament to approve the regulations.”

Savvides rejected the accusations, saying his March 5, 2021 opinion was no different to the one he gave in the summer of 2020 and the one the former attorney-general issued in March the same year.

“I will not humiliate the high institution I serve by following them in a downward spiral.”

Chiming in a little later, the interior ministry said both the auditor-general and MPs were making a mountain out of a molehill.

“The real question arising in relation to what transpired at today’s session of the House watchdog committee is not how much graft and corruption exists in this country, but how many more incidents of unbridled populism and mudslinging we shall experience until the parliamentary elections.”

The ministry described it as “unprecedented” that MPs and the auditor acted “in complete synchronisation in calling into question the institution of the Attorney-general.”