The EU has joined the US in a crackdown targeting countries operating investor citizenship schemes without residency requirement echoing national security concerns.

US Visa Blacklist

The US State department memo signed by Marco Rubio has flagged 36 countries in a blacklist for possible full or partial visa ban to enter United States on national security concerns. This in response to the Executive Order signed by President Trump in Protecting The United States From Foreign Terrorists And Other National Security And Public Safety Threats.

Among the countries, several countries running citizenship by investment were included: Antigua and Barbuda, Saint Lucia, Vanuatu, St.Kitts and Nevis, Egypt, Dominica, Tonga citing concerns of citizenship for sale schemes operated without any residency or genuine link to the country.

All concerned countries are given 60 days deadline to resolve the issue.

No official correspondence or communication has been sent from the United States Government to above countries.

EU Threat of Visa Free Suspension

The European Parliament and the Council have reached a consensus further strenthening the revision of the visa suspension mechanism, in effectively deterring and addressing situations of abuse of visa-free travel.  

The “operation” of investor citizenship schemes is added as a new grounds for triggering visa suspension mechanism (VSM), an effective measure to suspend visa free access with third countries operating golden passport programs. VSM has been triggered once in the past with the case of Vanuatu operating investor citizenship scheme.

The EU claims that Investor citizenship schemes operated by third countries with visa-free access to the EU can result in risks or threats to the public policy or internal security of the Member States, including those related to infiltration of organised crime, money-laundering, tax evasion and corruption. Investor citizenship schemes aim to attract investment by granting investors from third countries citizenship rights of the country concerned, under less stringent conditions than under ordinary naturalisation regimes. Where third-country nationals that would otherwise be visa-required for the EU acquire citizenship of a visa-free country thanks to such schemes, they can use them to bypass the regular short-stay visa procedure and the assessment of migration and security risks it entails.

The VSM is triggered if a significant risk or imminent threat to the public policy or internal security of Member States related to a third country listed in Annex II deriving from any of the following:

(i) a substantial increase in serious criminal offences, linked to the nationals of that third country, substantiated by objective, concrete and relevant information and data provided by the competent authorities;

(ii) hybrid threats;

(e) the operation, by a third country listed in Annex II, of an investor citizenship scheme, whereby citizenship is granted without any genuine link to the third country concerned, in exchange for pre-determined payments or investments;

If VSM is triggered on a country, temporary suspension of the visa exemption will be applied from nine months to 12 months (for the first phase) and from 18 months to 24 months (for the second phase) to allow appropriate time for dialogue with the third country in question and for it to take steps to remedy the circumstances that led to the suspension.

The EU The security and the external borders of the Member States have been profoundly impacted by recent geopolitical events, demonstrating that foreign interference may pose serious threats to the Member States’ security.

-European Commission

Commission’s monitoring of the EU’s visa-free regimes,have shown that

• Visa-free travel can also be the source of significant migration and security challenges.
• Increased irregular migration through overstays by visa-free travellers
• EU countries becoming transit hub for irregular entry to the EU.

The VSM (visa suspension mechanism), established in Regulation (EU) 2018/1806, is a safeguard against the “abuse” of visa-free travel.

The EU Regulation must now be formally adopted by the European Parliament and the Council before it enters into force, which will happen 20 days after publication in the Official Journal of the EU.  

As international pressure mounts, the fate of Golden passport programs clings on visa policy dictated by EU/US.