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‘Golden visas’ are recipe for corruption, NGOs warn

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By Agence France-Presse

EU member states risk helping wealthy foreigners launder billions of euros in dirty money by offering “golden visas” in exchange for investment, two NGOs warned Wednesday, urging officials to impose tougher checks on potential beneficiaries.

In their report, Berlin-based Transparency International and London-based Global Witness describe EU citizenship and residency as “just like a luxury good” which “can be bought”.

“By their very nature, golden visa schemes are an attractive prospect for the criminal and the corrupt,” they wrote in the report entitled “European Getaway: Inside the Murky World of Golden Visas”.

Several EU members have used such schemes to give passports to around 6,000 people and residency rights to around 100,000 people in the past decade, securing about 25 billion euros ($29 billion) of foreign direct investment in return, the report said.

Four EU members (Austria, Bulgaria, Cyprus and Malta) “sell” passports to wealthy investors while 12 offer them residency rights.

Spain, Cyprus, Portugal and Britain are the countries that have received the most investment in return for visas, the report found.

Spain received 976 million euros annually compared to 498 million euros in Britain.

But while the sums being waved about by investors should make governments vigilant about corruption, “that doesn’t appear to be the case,” the report noted.

Transparency and Global Witness singled out Malta, Cyprus and Portugal for particular criticism.

In Malta, where journalist Daphne Caruana Galizia was murdered last year while investigating corruption, including the awarding of golden visas, officials enjoy “wide discretion” in deciding who is eligible, the report said.

– Oligarch riches –
Among the beneficiaries are several Russians with “questionable backgrounds or finances”, some of them close to President Vladimir Putin, the authors said.

Cyprus and Portugal also give scant attention to the source of applicants’ wealth when deciding on their applications, the report said.

It noted that Cyprus had given passports to two Ukrainian oligarchs — Gennadiy Bogolyubov and Igor Kolomoisky — who are accused of defrauding a Ukrainian bank of billions of euros.

Transparency International and Global Witness called on Brussels to set up EU-wide standards of due diligence “to prevent the abuse of these schemes by the corrupt and the criminal”.

Reacting to the report, the EU’s Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos, said: “We are following this issue very, very closely.”

“We have committed to producing a report on national schemes granting EU citizenship to investors… including guidance for member states on necessary background checks for applicants,” he said.

He added that the guidelines were due to be published by the end of 2018.

The full Transparency International and Global Witness report is available at: http://transparency.eu/wp-content/uploads/2018/10/REPORT-European-Getaway-Inside-the-Murky-World-of-Golden-Visas_web.pdf