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The Oxidised Gold rush

By Neil Campbell.

A recent report by the EPRS – European Parliamentary Research Service, highlights many of the problems with the rise of the ‘Golden Visas’. From the sunny isles of the Med to the Baltic Sea, EU Citizenship is for sale and for as little as the price of a Porsche Spyder.

In addition to the report, there is a lot of noise on the internet about the rise in demand for EU citizenship. For those with the means however, becoming an EU citizen is a simple a matter of cash and knowing where to file the application.

 

What is a Golden Visa?

The term Golden Visa is as obvious as it sounds. Allegedly coined by the Portuguese, it is now an internationally recognised term. Many nations are happy to sell citizenship for cold hard cash, usually, although not necessarily, in the shape of investment.

A quick Google search for the phrase ‘Golden Visa’ returns over 8,000,000 hits. Competition for page one is fierce among the specialist consultants. Although, as one would expect, there is little from official channels.

From the sheer volume of consultants offering so called ‘Golden Visas’, it appears the trade in EU citizenship is booming. Figures released by the Portuguese Authorities in March this year corroborate this assertion as the numbers of approved Golden Visas topped the 6,000 mark for the first time.

 

An Oxidised Gold Mine 

This explosive headline appears in the new report, asserting that most of these CBI or RBI (Citizen / Resident by Investment) schemes are nothing short of governmental cash grabs. That certainly appears to the be the case for Portugal, whose Golden Visa schemes has already netted the country $3.7 billion in foreign investment. That figure represents a fair chunk of the estimated €25bn total amassed by the 28 member states through similar schemes over the last decade.

 

The Cheapest Golden Ticket

Details are somewhat opaque regarding the process. After some digging, however, EUAC can reveal that the cheapest way legally to establish yourself as an EU citizen comes via Greece.

Within the EU Greece has had a tougher time than most. Over the last decade or so the EU has nudged Greece into crippling austerity. Consequently, the furious populace is on the edge of EU rebellion. Whether this is the reason there is little, if any, fuss over international investment is a moot point. It’s easy to obtain residency in Greece as long as you grease the right palms.

 

What does EU Citizenship via Greece cost?

Aside from heavy taxation and unexpected bills, a Greek Passport and the right to travel and live in the Schengen zone costs just €250,000 Euros. That’s the price of your residential property. Next, you need only live in Greece for Seven years, all the while with all the benefits of full citizenship. Finally, there’s the matter of jumping through some bureaucratic hoops and hoping your application falls on the desk of one of the rare pro-immigration officials and you’ll be as Greek as Philosophy.

 

All Roads Lead to Brussels  

After Greece, comes the country which coined the phrase Golden Visa. Portugal has a long history of open immigration and its terms are similar to Greece. The actual benchmark for real estate investment is a touch higher at €350,000 Euros. For your investment, you’ll receive a residency permit which you may exchange for a Portuguese Passport and citizenship after only five years.

 

The rise of Golden Visa Consultants

Behind the scenes it would appear many of these citizenship consultants have close ties to or indeed may even work within their own country’s immigration department. A fact highlighted in October’s report, which concluded that there is a need for greater transparency regarding this issue. The report goes further, stating the need for clear guidelines about how these intermediaries operate and highlighting the danger of private companies advising on, operating and even implementing these CIB programmes on behalf of their own governments.

 

Tele-Residents 

Dual nationality is nothing new for high net worth individuals. It seems, vast troves of resources are an attractive commodity to most nations. Indeed, according to the Knight Frank Report over 34% of high net Worth individuals already claim dual citizen ship and competition for the remaining 66% must be fierce.

However, attractive or not, it is these long-distance residents who appear to be causing the most concerns.

As highlighted in the report, most of these schemes appear open to abuse. In particular the CBI/RBI schemes (where applicable) offered in Bulgaria, Cyprus, Estonia, Ireland, Italy, Latvia, Malta and Portugal do not demand much in the way of physical presence. The report actually claims that the amount of time these nations require applicants to physically spend on their soil contravenes current EU legislation.

 

Open to Corruption. 

Recent cases have caused a good deal of controversy and the report also highlights a number of these.

Most notably, the report references The Pilatus case, an international scandal involving Ali Sadr Hasheminejad, then Chairman of the Pilatus Bank, which is licensed in Malta. Hasheminejad, was arrested in 2018 and charged with a number of offences including bank fraud and money laundering. A leaked report from the Malta Financial Intelligence Analysis Unit (FIAU) then raised serious questions about the bank’s activities and fuelled speculation it had received kickbacks related to Maltese Passport applications.

Malta is not alone when it comes to corruption. The report also mentions similar scandals in Ireland and even the UK. Madiyar Ablyazov, the son of a Kazakh banker turned fraudster. Madiyar Ablyazov gained UK residence as a Tier 1 Investor. Effectively for lending the UK £1 million individuals are granted a Golden Visa. What makes this case unusual is the fact that the UK Home Office failed to investigate the source of the money.   Those funds, as it turned out, had allegedly been looted from the Kazakh bank where his father was the chairman. Last year, despite a number of lawsuits and legal battles, Madiyar was returned the full £1 million investment, resulting in the UK effectively laundering the stolen Kazak money on behalf of the Ablayzov’s.

The report also found that Cyprus and Portugal didn’t appear to question the source of their candidates’ wealth.

Malta’s Golden Visa scheme even offered special consideration for convicted criminals and those under investigation.

Additionally, the report cited usually high success rates for golden visa applicants in Latvia, Hungary and the UK. Rates of 90% suggest background checks in those countries are somewhat lax.

 

Open Borders 

To be clear, EUAC, is all for open borders, but we believe that citizenship should consider merit rather than net worth. We also believe the process should be transparent, a sentiment shared by the recent report. As it stands, the borders of the EU appear open to anyone with enough money to grease the wheels of progress, regardless of whether they need or deserve citizenship.

 

Not all Passports are Equal

Of course, most of the countries in the EU have citizenship programmes, but most as you would expect are rigorous and hard to abuse. From Germany to the Netherlands the act of seeking citizenship is an arduous one and there are no clear short-cuts. However, for those with the money and the desire the European Union’s borders are open for business, which is why we at EUAC will continue to campaign to call out these so-called ‘Golden Visa’s’ programs as another example of EU corruption.

 

In Conclusion

The EU’s own report suggests the EU act to solve a number of discrepancies in the application of these Golden Visa Schemes. Indeed, the European Parliament has called on the European Commission to look into the matter and deliver guidelines to prevent them from undermining the very values of the European Union.

The report’s findings demonstrate a need for more stringent background checks, an increase in overall transparency and a general overhaul of all these Golden Visa schemes. Time will tell if the EU is listening.

 

Sources:

(source: http://www.europarl.europa.eu/RegData/etudes/STUD/2018/627128/EPRS_STU(2018)627128_EN.pdf)

(sources https://www.sef.pt/documentos/56/Mapa_ARI_EN_march18.pdf

https://www.imidaily.com/editors-picks/portugals-golden-visa-passes-6000-approvals-for-the-first-time-show-march-data/ )

(source https://www.knightfrank.com/wealthreport)

(source http://www.independent.com.mt/articles/2018-02-16/local-news/David-Casa-to-present-leaked-FIAU-report-to-magistrate-6736184924)

(https://www.theguardian.com/uk-news/2017/jul/04/golden-visa-immigration-deal-british-citizenship-home-office)

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