• Wednesday, Sep 28, 2022
  • Last Update : 09:54 am

EU pushes for crackdown on 'golden visas'

  • Published at 03:14 pm January 23rd, 2019
European Union flags
A European Union flags flutters outside the EU Commission headquarters in Brussels, Belgium Reuters

Non-government organisations have already flagged countries such as Malta, Cyprus and Bulgaria

The European Union will urge member states Wednesday to crack down on schemes to grant "golden visas" to foreign investors, warning they bring corruption and money laundering in their wake.

Officials told AFP the European Commission, the EU's executive arm, will publish its first report urging members to curb the practice of giving wealthy foreigners - often Chinese, Russians and Americans - residency or citizenship in return for investment.

"What the reports finds is that these schemes pose a number of risks, in terms of security, money laundering or tax evasion," an EU official told AFP.

If member states fail to tighten their rules and become "more transparent the Commission is clear, we will take action if necessary," the official added.

Wealthy candidates for residency or citizenship do not face sufficient security and background checks to prevent them from posing a security risk or laundering money, according to the report.

Non-government organisations have already flagged countries such as Malta, Cyprus and Bulgaria for offering wealthy foreigners citizenship that allows them to move freely in most of the 28-nation bloc. Many other countries grant residence permits to foreign investors.

In October last year, Berlin-based Transparency International and London-based Global Witness called 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 euro's of foreign direct investment in return, the report said.

Four EU members - Austria, Bulgaria, Cyprus and Malta - "sell" passports to wealthy investors while 12 more offer them residency rights.

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

Spain received 976 million euro's annually compared to 498 million euro's 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 activists reported.

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