Daily Management Review

Transparency International: Europe should stop selling citizenships


Existence of citizenship or residence permit programs in exchange for investments in a number of EU countries potentially opens the door to Europe for criminals and corrupt officials, according to a report published by Transparency International. Its authors urge the EU to make the process of granting residence permits or citizenship in exchange for investments more transparent and unified.

Four EU member states sell their citizenship. 12 EU members trade residence permits. Over the past ten years, more than 6 thousand new citizens and almost 100 thousand new residents have appeared in Europe in this way. Over ten years, the volume of foreign direct investment attracted under the programs of investment citizenship and residence permits has amounted to € 25 billion. Spain, Cyprus, Portugal and the United Kingdom earned an average annual income of € 976 million, € 914 million, € 670 million and € 498 million respectively from citizenship trade or the right to live on their territory. These are the data presented in a report, published on October 10 by the international organization Transparency International (TI), which is considered the world's leading expert on corruption and fight against it.

As noted in the report, there are a lot of questions regarding investment citizenship programs in the EU countries.

These programs are often non-transparent, as there are no uniform standards and rules for them in the EU. Therefore, according to the report’s authors, they are vulnerable and can be used for their own purposes by businessmen with sticky fingers.
“If you have a lot of money that you received in a dubious way, then buying a place that could be your home away from the place where you stole is not just an attractive idea. This is a sensible idea,” said Naomi Hirst, an employee of Global Witness, who co-authored the TI report.

It is assumed that the state, preparing to grant a residence permit or even citizenship to a rich foreigner, verifies their reliability and the legitimacy of capital. According to TI, it is not. Cyprus and Portugal, the report says, “do not seem to ask questions about the applicants’ sources of wealth,” and the fact that more than 90% of applications for “golden visas” are approved in Latvia, Hungary and the United Kingdom are evidence of superficial checks. By the way, it was the cases of obtaining a residence permit by undesirable persons that caused termination of such a program in Hungary in 2017 and tightening of inspections both on new applications and on already issued residence permits in the UK.

As a measure that could protect such programs from abuse, TI lists creation of pan-European standards for verifying applicants and transparency of the programs themselves. In addition, TI called on the EU to regularly assess the risks that arise from the existence of programs.

source: ft.com