The EU has issued a grave warning with operation of CBI/RBI schemes in a new 2024 report, expressing concerns they commodify EU citizenship and residence rights and weaken vetting and due diligence systems, thereby posing risks of corruption, money laundering, security threats and tax avoidance.
Between 2011 and 2019, over 132 000 people obtained residence or citizenship in the European Union (EU) through CBI or RBI schemes, generating a total investment inflow of at least €21.4 billion.
The report said European Parliament has been an ardent proponent of abolishing CBI schemes and regulating RBI schemes. According to the EAVA report, both of these schemes:
- harm the principle of sincere cooperation;
- commodify EU citizenship and residency rights;
- erode the principles of fairness and non-discrimination;
- weaken vetting and due diligence systems, thereby posing risks of corruption, money laundering, security threats and tax avoidance
- do not have any adequate safeguards for macro-economic governance.
One problem identified covers the situation of Russian nationals who, prior to the Russian invasion of Ukraine in 2022, represented a large share of applicants for CBI and RBI schemes in the EU, said the report.
Several Member States have made changes to their RBI schemes. For example,
- Ireland abolished its IIP scheme in February 2023, and
- the Netherlands followed suit in April 2024.
- Portugal retained its RBI scheme but removed the option of investing in property.
- Spain decided to do the same on 9 May 2024 (although a legislative proposal initiated on 14 May 2024 is still pending), even though a bill had already been proposed in February 2023.
- Hungary reintroduced one that came into effect on 1 July 2024.
As with candidate countries, Albania suspended its plans to introduce a CBI scheme, Montenegro decided to phase out its existing scheme, while North Macedonia kept its scheme in place.
The plenary adopted the report in its resolution of 9 March 2022. The resolution contained six specific proposals:
- Proposal 1: an EU-wide gradual phasing out of CBI schemes by 2025;
- Proposal 2: a comprehensive regulation covering all RBI schemes in the EU;
- Proposal 3: a new category of EU own resources, consisting of a ‘CBI and RBI adjustment mechanism’;
- Proposal 4: a targeted revision of legal acts in the area of anti-money laundering and countering the financing of terrorism;
- Proposal 5: a targeted revision of the Long-Term Residence Directive;
- Proposal 6: ensuring that third countries do not administer harmful RBI/CBI schemes
The EU report is available for download (pdf)
