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Montenegro's Adriatic coast. The tiny Balkan country recently announced plans for a new investor citizenship programme.
Golden keys to the EU’s back door
Yet there is also a downside. Only Austria and Malta publish lists of new citizens or residents, and seven of the 17 schemes have not disclosed how much investment they have raised, says the Global Witness/Transparency International report. It stresses that schemes are insufficiently monitored and governments “do not seem to question where applicants’ money comes from.”
“Just like a luxury good, European Union citizenship and residency rights can be bought. There are any buyers and there is not shortage of suppliers, which explains why investment migration is a growing, multi-billion-euro industry,” says the report.
Given the interconnections between EU member states, while some members profit, the bloc’s citizens as a whole take a “sizeable hit”. “Poorly managed schemes allow corrupt individuals to work and travel unhindered throughout the EU and undermine our collective security,” said Laure Brillaud, anti-money laundering policy officer at TI EU, and a co-author
of the report, at its launch.
“By their nature, these schemes pose inherent risks for corruption, as people who steal money from their home countries need other jurisdictions to escape to when the going gets tough,” the report says.
EU institutions on the case
EU institutions have honed in on the issue in recent months. In January,
the European Commission issued
a report on the risks of investor citizen- ship and residency schemes in the EU,
Clare Nuttall in Glasgow
EU members including Bulgaria and Hungary have taken steps to end their investment for citizen- ship programmes as governments that have extended such schemes come under increasing pressure from the European Commission.
At the same time, however, countries that have been pursuing integration with the EU – notably Moldova and Montene- gro – have recently rolled out new and similar schemes, despite also receiving notice from the European Commission that they will be taken into account as part of the EU accession process.
Investment for citizenship programmes, also dubbed “golden passport” or “golden visa” schemes, make it possible for foreign nationals to secure fast-track citizenship or residency in return for making substantial investments in the host country. Given the popularity of
EU passports, the average cost is around €900,000, though this varies from just €250,000 in Greece or Latvia to €2mn for Cyprus and as high as €10mn for Austria (although the Austrian figure has not been publicly disclosed), accord-
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ing to a report from international watch- dogs Global Witness and Transparency International published in 2018.
The report found that at least 6,000 passports and almost 100,000 visas had been sold within the EU in the previous decade, with the largest numbers (over 100,000 each) granted by Spain, Hungary, Latvia, Portugal and the UK.
There are substantial financial benefits to host countries: the report finds that around €25bn was attracted to
EU countries through golden visa programmes during the 10-year
“Golden visa” schemes, make it possible for foreign nationals to secure fast-track citizenship or residency in return for making substantial investments in the host country”
period, and an estimated $13bn a year worldwide. The market is a growing one, and is expected to reach $20bn a year worldwide within a couple of years.
and outlined steps to address them. Risks it identified concern security, money laundering, tax evasion and corruption, and these are amplified by a