EU Urges Crackdown on Golden Visa Programs

Published: 22 January 2019

eu buildingEU states told to tighten checks on Golden Visas (Photo: Flikr)

By Harry Holmes

The European Union (EU) is expected to release a report Wednesday urging member states to tighten controls over their Golden Visa programs, warning the schemes can be used by organized crime groups for money laundering, corruption and tax evasion.

The report is expected to make recommendations on how to regulate schemes that allow wealthy individuals to purchase residency or citizenship in exchange for investment.

On the eve of the report’s release, Bulgaria today announced a new bill that would stop the sale of citizenship to foreign investors in light of reporting by OCCRP last year.

Twenty states, including the United Kingdom, Ireland and Spain, sell residency permits while Malta, Cyprus and Bulgaria currently offer “citizenship for sale” schemes.

According to the Financial Times, a draft version of the report says that investor citizenship and residence schemes “create a range of risks for member states and for the union as a whole: in particular, risks to security, including the possibility of infiltration of non-EU organized crime groups, as well as risks of money-laundering, corruption and tax evasion.”

The new report is the EU commission’s first examination of the schemes. It identifies a number of concerns, including standards of security and background checks for applicants and the source of their wealth, that varies from country to country.

The use of Golden Visa schemes by questionable individuals was recently revealed by OCCRP,  among other news organizations.

For example, Cyprus charged top dollar to award citizenship to 1,685 foreign investors since 2008, many from the former Soviet Union, China, Iran and Saudi Arabia. This includes Oleg Deripaska a Russian billionaire with close links to Putin.

Montenegro is another haven for wealthy foreigners, providing residency to individuals including Thaksin Shinawatra, the former prime minister of Thailand convicted of corruption after fleeing the country in 2008, and Mohammed Dahlan, a former Palestinian minister accused of embezzling state funds.

Over the last 10 years, EU states collected almost US$29 billion from Golden Visas according to a recent report by Transparency International and Global Witness. The United Kingdom, Spain and Portugal are some of the highest earners from the schemes having each sold more than 10,000 visas.