Cyprus 'selling' EU citizenship to 'super-rich' Russians and Ukrainians

Passports issued under the ‘golden visa’ scheme has raised €4bn since 2013 and the number is steadily rising

18 September 2017, 8:46am
'All countries offering golden visas must make sure the lure of investment doesn’t mean a race to the bottom on values', said anti-corruption group Global Witness
'All countries offering golden visas must make sure the lure of investment doesn’t mean a race to the bottom on values', said anti-corruption group Global Witness
According to reports, Russian oligarchs and Ukrainian elites accused of corruption are amongst the hundreds of people who have acquired EU passports under controversial “golden visa” schemes.

The government of Cyprus has raised more than €4bn since 2013, by providing citizenship to such individuals, granting them the right to live and work throughout the whole of Europe, in exchange for the investment of cash. It is understood that over 400 passports have been issued through such a scheme in 2016 alone.

Before 2013, Cypriot citizenship was granted on a discretionary basis by ministers, in a less formal version of the current arrangement.

A leaked list of the names of hundreds of those who have benefited from these schemes includes individuals with considerable political influence and prominent business people.

Such a leak marks the first time a list of those granted Cypriot citizenship has been revealed. A former member of Russia’s parliament, a gambling billionaire and the founders of Ukraine’s are among the new names.

The list exposes the highly profitable industry and also raises questions about the security checks, which are carried out on applicants.

European politicians have been watching the sector’s growth with concern, with some saying the schemes undermine the concept of citizenship. Ana Gomes, a Portuguese MEP, described “golden visas” as “absolutely immoral and perverse”.

“I’m not against individual member states granting citizenship or residence to someone who would make a very special contribution to the country, be it in arts or science, or even in investment. But granting, not selling,” she said.

She also added that she had attempted, several times, to obtain the name of golden visa byers in Portugal, but never had any success. “Why the secrecy? The secrecy makes it very, very suspicious”, she said.

Later this year, the European parliament will debate an amendment tabled by Gomes requiring countries to carry out thorough security checks on “golden visa” applicants. The European Commission recently ordered its own inquiry into whether checks were being properly conducted.

Launched in 2013, Cyprus’ current citizenship-by-investment scheme requires applicants to place €2m in property or €2.5m in companies or government bonds. There is no language or residency requirement, other than a visit once every seven years.

Cousin of Syrian president Bashar al-Assad, Rami Makhlouf, was first placed under US sanctions in 2008 due to allegations claiming he had benefitted from corruption. Cyprus issued citizenship to him in 2010. It is unclear what due diligence checks the country carried out on his application.

Makhlouf was subsequently sanctioned by the EU in 2011 and his Cypriot citizenship was revoked after the outbreak of the Syrian civil war.

Other purchasers are prominent Russian business people or politicians – “politically exposed persons” in industry parlance – requiring stringent checks on the sources of their wealth. 

Billionaire art collector Dmitry Rybolovlev found himself at the centre of international attention last year, after it emerged that his private jet crossed paths with that of Donald Trump during his presidential campaign. Rybolovlev denied meeting Trump and said the flight paths were a coincidence.

In 2005, Trump paid $41m for 515 N County Road, a mansion in Florida’s Palm Beach. Following renovations, he sold it to Rybolovlev three years later for a reported $95m.

A spokesman for Rybolovlev, who acquired Cypriot citizenship in 2012 and is worth an estimated $7.4bn according to Forbes, said it was “natural [for him] to get citizenship upon becoming an investor in Bank of Cyprus”.

The spokesman also reiterated that Rybolovlev has never met Trump and added that the Palm Beach mansion had been demolished and divided into three lots.

Global Witness, the anti-corruption group, demanded tougher checks in response to the findings.

“All countries offering golden visas must make sure the lure of investment doesn’t mean a race to the bottom on values. That means ensuring the sharpest of checks on applicants and safeguards on process,” said the group in a statement.

“Without these, they risk offering a ‘get-out-of-jail free card’ to the corrupt and criminal.”