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Curbing corrupt abuse of EU golden passports & visas: European Commission must heed Parliament’s proposals

Especially at the height of Russia-Ukraine war, member states who have been blocking EU-wide reform of schemes offering kleptocrats a safe haven are out of excuses

Transparency International welcomes the European Parliament’s proposal to significantly revamp EU investment migration schemes. The Parliament’s report, adopted this week, echoes Transparency International’s positions and calls for the end of golden passports while regulating golden visas.

Future-oriented legislative action is essential, but not enough considering myriad past abuses. Countries should review previously awarded golden passports and visas in all countries, and the European Commission should oversee the process of revoking citizenship or residency from all suspicious individuals. EU member states and the Commission need to act quickly, since their EU passports would make it more difficult to trace assets of Kremlin-linked Russians.

Transparency International has argued for years that fast-track investment migration schemes are riddled with corruption. The schemes on offer in the EU are particularly broken, and we have called on the European Commission to end the corrupt abuse of these programmes since 2018. Key solutions include: public authorities conducting enhanced due diligence on applicants and their money; requiring private sector intermediaries to adhere to anti-money laundering obligations; and harmonising rules across the EU to prevent a race-to-the-bottom in terms of standards.

The Commission previously attempted to devise a list of common security checks in collaboration with member states, but some insisted that citizenship and residency are national competence, stalling the process. Members of the European Parliament have now said, loud and clear, that this inaction is unacceptable and called for key fixes, such as introducing minimum physical residency requirements for applicants and prioritising “productive investments in the real economy”.

Maíra Martini, Transparency International’s expert on corrupt money flows, said: “Over the last decade, corrupt public officials and business people bought up golden passports and visas, helping to conceal their assets and identities. Russians reportedly make up nearly half of those who have acquired citizenship using this route. Scandals have shown that these opaque schemes are not about genuine investment or migration.

“The European Commission has long acknowledged the problems with such schemes, but has failed to take decisive action. Now is the time to close the door to kleptocrats and their money.”

After the Cyprus Papers scandal broke, the European Commission saw the need for immediate action and initiated infringement proceedings against Cyprus and Malta – while alerting Bulgaria – over the sale of citizenship, but has not taken more comprehensive measures.

Malta is a key country that attracted wealthy Russians, and has awarded citizenship to individuals who were later included in the US government’s so-called Kremlin list. Despite numerous scandals and pressure from the EU, Malta appears intent to continue to sell citizenship. In the wake of Russia’s invasion of Ukraine, authorities have only made temporary changes – now pausing applications from Russia and Belarus as they are unable to conduct sufficient due diligence.

Just last month, as the Russia-Ukraine crisis was escalating and concentration of suspect Russian wealth in London came into a renewed focus, the UK government finally moved to cancel its golden visa programme – a step which is both welcome and long overdue. Now, urgent action is needed in the EU.

Roland Papp, senior policy officer on illicit financial flows at Transparency International EU, said: “The EU should ban the sale of golden passports once and for all. Member states should ensure that citizenship or residency rights awarded to sanctioned individuals are immediately revoked. This would signal that the EU no longer offers a safe haven to kleptocrats.”

Notes to editors

See Citizenship and residence by investment schemes, the own-initiative (INI) report prepared by the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE). Transparency International and other experts provided key evidence and input for the report.

For background on the schemes and corruption risks associated with them, see European getaway: Inside the murky world of golden visas, a 2018 report by Transparency International and Global Witness.

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Transparency International EU, Brussels:

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