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Golden visas: audit office raises concerns over interior ministry’s response (Update)

The Finance Ministry's failure to follow procedure and weaknesses when it came to complying with legal and regulatory provisionswere among the main concerns highlighed in a special report by the Auditor-General's office, released on Wednesday.
File photo: finance ministry

Audit office spokesman Marios Petrides on Friday accused the interior ministry of “flouting” the recommendations of the audit office, amid discussions on the latter’s report on the golden visa programme.

On Thursday, the audit service urged the interior ministry to “seriously consider the possibility of abolishing the golden visa programme,” wherein people who invest €300,000 in Cyprus are granted permanent residence in the country. To date, around 5,800 people have been granted permanent residence via the scheme.

“We are not saying it should definitely be abolished, but it is our opinion that the government should at least consider it,” Petrides said while speaking to Trito radio on Friday morning.

“It’s a flimsy programme, with flimsy implementation that violates the legislation”.

He was responding to earlier statements by Interior Minister Constantinos Ioannou, who called in to defend his ministry’s handling of the programme.

Reiterating statements made the previous day, Ioannou said that his ministry is in “complete agreement” with the report’s recommendations to toughen criteria for the fast-track visa programme to third country nationals, saying that they have already been dealing with streamlining the services since taking up the role as the new government.

Ioannou said that when he took over as interior minister, he had called for immediate measures to bolster the programme, by making criteria for the visas stricter.

“When we took over in March, we became aware of the issues with this particular programme,” he said, adding that a letter had been sent to the interior ministry calling for changes.

Thus, the criteria were modified through a cabinet decision to streamline the programme, he said.

Further elaborating, he said that the new criteria require applicants to submit data on an annual basis proving that the beneficiary still maintains the initial investment and the required income.

The criteria also state that it is required to provide a clean criminal record from the investor’s country of origin every three years, and proof that the money comes from the applicants and not by third parties.

The ministry has also given instruction to intensify checks on beneficiaries of the programme, so when violations are found the visa can be revoked.

“There had been correspondence from the previous interior ministry to the finance ministry, saying that changes were needed,” Ioannou said.

“We have stepped in and made these changes, we’ve shielded it, and we proceed as such,” he said, adding however that his ministry is always open to discussions and recommendations from the audit office.

In its own subsequent statement, the Cyprus Bar Association said all information was being investigated, highlighting that unsubstantiated general comments ran the risk of creating impressions on the public that could hurt the profession’s reputation.

It added it had already sent a letter to the interior ministry asking for more evidence.

Responding to Ioannou’s comments a few hours later, Petrides said that the changes the interior ministry claims took place actually happened after the audit office had begun its investigation.

“The latest review [of the criteria] that supposedly closed any gaps, was submitted during the preparation of the report, was investigated, and is commented on in the report,” Petrides said.

“Our opinion is that the programme still has gaps, and that the ministry flouts the legislation and previous reports on the matter,” he added.

The spokesman said the audit service’s concern is that the golden visas programme is tracing a course reminiscent of that of the golden passport scheme.

“In 2016 the European Commission rang the alarm bell [about the golden passport scheme]– and we said don’t worry, we’ll change the criteria,” he said, commenting that in the next two years the first articles on the scheme were published by international media.

“We responded in 2019 that we made the programme stricter, and we saw what happened there,” he said.

“I can tell you that almost all remarks that were valid for the golden passports are repeated with the golden visas, despite the streamlining of criteria,” he stressed. “It doesn’t answer the basic concerns of the audit office, or the European Commission”.

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