The European Commission has presented a comprehensive report on investor citizenship and residence schemes operated by a number of EU Member States, for the first time, addressing several risks and outlines several steps.
The report maps the existing practices and identifies certain risks such schemes imply for the EU, in particular, as regards security, money laundering, tax evasion and corruption. A lack of transparency in how the schemes are operated and a lack of cooperation among Member States further exacerbate these risks, the report finds. The Commission’s report focuses on the naturalisation schemes that are classified as investor citizenship schemes, which are a new form of naturalisation that systematically grant citizenship based on an investment.
Commissioner for Justice, Consumers and Gender Equality, Věra Jourová, said: “Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market. People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States.
There should be no weak link in the EU, where people could shop around for the most lenient scheme.”
Investor citizenship schemes (CBI)
In the EU, three Member States (Bulgaria, Cyprus and Malta) currently operate schemes that grant investors the nationality of these countries under conditions which are less strict than ordinary naturalisation regimes. In these three Member States, there is no obligation of physical residence for the individual, nor a requirement of other genuine connections with the country before obtaining citizenship.
Investor residence schemes (RBI)
Investor residence schemes (also known as golden visas), while different from citizenship schemes in the rights they grant, pose equally serious security risks to Member States and the EU as a whole. A valid residence permit gives a third-country national the right to reside in the Member State in question, but also to travel freely in the Schengen area. While EU law regulates the entry conditions for certain categories of third-country nationals, the granting of investor residence permits is currently not regulated at EU level and remains a national competence. Currently, 20 Member States run such schemes: Bulgaria, Czechia, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia and the United Kingdom.
Investment amounts can range from EUR 13,500 to over EUR 5 million in the form of capital investment, investment in immovable property, investment in government bonds, or donations to an activity contributing to the public good charity or one-time contributions to the national budget.
What commission will be doing?
The Commission will monitor wider issues of compliance with EU law raised by investor citizenship and residence schemes and it will take necessary action as appropriate. For this reason, Member States need to ensure, in particular, that:
· All obligatory border and security checks are systematically carried out;
· The requirements of the Long-Term Residence Permit Directive and the Family Reunification Directive are properly complied with;
· Funds paid by investor citizenship and residence applicants are assessed according to the EU anti-money laundering rules;
· In the context of tax avoidance risks, there are tools available in the EU framework for administrative cooperation, in particular for exchange of information.
Group of Experts
The Commission will set up a group of experts from Member States that will work to address the specific risks posed by investor citizenship schemes. It will also address the transparency of investor citizenship schemes and of discretionary naturalisation procedures, which permit acquisition of citizenship based on investment. The group of experts shall put in place procedures for the exchange of information and statistics on such schemes, including the exchange of information concerning applicants whose applications for citizenship have been turned down in one Member State on grounds of posing a security risk. Finally, the group should develop by the end of 2019 a common set of security checks for investor citizenship schemes, including risk management processes that take into account security, money laundering, tax evasion and corruption.
Read more here
