Cyprus plans to continue scrutinizing investors who were given Cypriot passports before 2018, after announcing on Wednesday that it will strip 26 foreign investors of citizenship granted under the citizenship by investment (CBI) program – known as the “golden passport” scheme.
Cypriot Minister of Interior Constantinos Petrides said on Wednesday that authorities will review those granted citizenship before 2018, when it first introduced stricter eligibility criteria for the program.
“Those concerned will have the right to complain within a few days,” Petrides said.
The decision comes after Cyprus started a process in September to become a full member of the Schengen area. The country issued a declaration of readiness to the European Union and the evaluation process by the EU is expected to start immediately, foreign minister Nikos Christodoulides said on November 4, according to the Cyprus News Agency.
Earlier this year, the EU urged its member countries to crack down on such citizenship schemes granting “golden passports and visas.”
“A number of EU countries operate schemes that grant foreign investors citizenship or a right of residence,” the European commission said in a statement on Twitter. “These ‘golden passports’ can cause security risks for the EU, such as money laundering, tax evasion and corruption.”
Global citizenship and residency advisory firm Henley & Partners – which has offices in Greece, Cyprus, and Malta, among others – said that the move can potentially minimize risks associated with the CBI program.
A significant portion of the firm’s clientele that are seeking citizenship by investment hail from East & South East Asia, the post-soviet union space, and South and West Africa.
“What is important to note is that due to the inherent nature of the CBI process, CBI citizenship can be consistently reviewed, providing another level of risk mitigation,” a spokesperson told Al Arabiya English.
“It’s worth comparing this to the 1 million EU naturalizations every year that are processed with significantly less due diligence and no review process; thereby representing a potentially significant security, intelligence and rule of law risk to EU,” the spokesperson added.
In Cyprus, the passport program grants citizenship to foreigners who invest about 2 million euro, or $2.2 million, in local businesses or real estate. The program has thus far issued 4,000 passports to investors.
Media reports have cast doubt on Cypriot authorities’ vetting process of investors who were granted citizenship, but were later found to have been linked to authoritarian governments and were involved in large-scale money laundering.
Cyprus, also known for being a tax haven for its lax tax regulations, had launched the program in 2013 amid its financial crisis when Cypriot banks nearly collapsed after lending money to cash-strapped neighbor Greece.
“This program helped the country during a very difficult period,” Petrides was quoted as saying by the Associated Press. “But beyond that, it shouldn't cause more damage than all the good it has done.”
Cyprus is not the only country to run a citizenship by investment program. Some of the other countries include Malta, Grenada, and Dominica.
In Turkey, foreigners can gain citizenship by either investing $500,000 or depositing the amount in a bank. One can also become a citizen by buying real estate worth $250,000 in the country.SHOW MORE