War on Kremlin money: Brussels closer to shutting down golden passports

The door to golden passports which countries like Malta used to cash in on EU citizenship, is nearer to be shut down, as MEPs and the European Commission appeared to be on the same page for calling time on elites who use countries like Malta to buy EU citizenship.

MEPs will vote tomorrow on a report by Dutch MEP Sophie In’t Veld (Renew) that calls for the stoppage of all citizenship-by-investment scheme by 2025, through a gradual phasing-out.

The legislative report by Int’t Veld means that the European Commission must give serious reasons to ignore a request to use its power of initiative and draw up a law that calls upon member states to stop golden passport schemes.

“The time to ask national governments nicely is over,” she told Didier Reynders, the EU’s Commissioner for justice. “CBIs must disappear, structurally, as the outcome of an EU law. The Commissio has the power to do this in the interests of European citizens.”

The debate on Monday evening showed that In’t Veld’s report has a big majority supporting it, with the Dutch MEP promising Reynders that if the Commission ignores the call from MEPs, she would not let it sleep. “I will harass you, chase you, and hunt you down until we have the proposals on the table.”

And the voice of MEPs was loud and clear in the Strasbourg plenary tonight, as MEPs from all political blocs called on the European Commission to target Russian oligarchs and their wealth in the EU by putting an end to so-called golden passports.

“In July 2019, before her election by Parliament, Commission President Von der Leyen committed to responding to requests for legislative proposals by Parliament ‘with a legislative act in full respect of the proportionality, subsidiarity and better law-making principles’. This legislative initiative of Parliament fully meets all those criteria,” In’t Veld said.

Since 2014, Parliament has been calling for a ban of CBI/RBI schemes, but so far the Commission has not put forward any proposals. Although the Commission claims it has no legal basis for legislative action, it did launch infringement proceedings against Cyprus and Malta in October 2020.

European Commissioner for justice Didier Reynders declared that it was the intention of the Commission to pursue the elimination of golden passports. “We already launched infringement procedures in 2020 to put a complete end to these schemes... Malta needs to act not only for Russian citizens, but must consider removing this activity completely.”

Malta’s citizenship-by-investment scheme was suspended for Russian and Belarusian nationals due to the ongoing conflict between Russia and Ukraine only last week, but only because “existent due diligence checks cannot be carried out effectively because of the war.”

READ ALSO: Golden passports and SWIFT, Labour ministers stick to EU line on Russia sanctions

In’t Veld’s report calls for a comprehensive set of measures to phase out golden passports, harmonise RBI schemes; increase due diligence checks for all applicants and family members, including source of funds; phase out golden passports; lay down minimum physical residence requirements and minimum active involvement in the investment; and create a monitoring mechanism on applicants’ continued compliance with the legal requirements of RBI schemes.

It also foresees for the proceeds of the sale of citizenship and residency benefit the Union budget, given that they are based exclusively on the benefits of Union membership.

“CBI/RBI schemes are a threat to security in Europe and a threat to our democracy. The contrast with the treatment of refugees or labour migrants, or of Union citizens with dual citizenship born in the Union, is staggering,” In’t Veld said.

READ ALSO: Malta’s reformed citizenship-by-investment programme

Dutch MP Jeroen Lenaers (EPP) said that with the Russian invasion of Ukraine, it looked like all member states bar Malta “had woken up and realised it was not necessarily the best idea to offer a back door to each individual with loaded pockets... I call upon Roberta Metsola to tell our leaders in the EU to ban the sale of passports. Let’s be clear: the Russian elites with links to the Kremlin cannot be welcome in the EU.”

Spanish MEP Juan Fernando Lope Aguilar (S&D) accused such schemes for the privileged few to get EU citizenship of being immoral and in complete contradiction of European values.

Maltese Nationalist MEP David Casa called the sale of passports a “tool in the hands of aggressors”.

“The day Putin invaded, the EU introduced unprecedented sanctions against oligarchs. But the sale of passports had already become a tool in their hands. And what’s going to happen now?... It’s high time for European countries to close this chapter once and for all.”