"Europe's doors are open to criminals and corrupt thanks to negligent, opaque and poorly managed 'Golden Visa' schemes, according to a report released Wednesday by Transparency International (TI) and Global Witness. The two anti-corruption organizations say that the financial benefit of citizenship and residence schemes for investment "is hampered by the risks arising from lack of due diligence, conflicts of interest and broad discretionary powers."
"The Golden Visa offer a safe haven from the authorities to those who may be looking to seize stolen goods and the freedom to travel without raising suspicion, "said Naomi Hirst, a senior activist at Global Witness, quoted in a statement.
"Faced with these inherent risks, these schemes must have the highest standards of verification, so that countries know who the recipients are and where the money came from. Unfortunately, that's not what we're seeing. The current approach exposes countries to corrupt individuals and rises the corruption of the state itself, as profit-hungry governments ignore the dangers, "he said.
The report is released a few weeks after police in Finland intervened in a real estate agency that was at the center of a purported $ 10 million money laundering operation controlled by a Russian businessman who would have acquired Maltese citizenship.
Laure Brillaud of TI and co-author of the report said that "poorly managed schemes allow corrupt individuals to work and travel freely across the European Union and undermine collective security. That is why action at Union level is urgently needed. Brussels needs to set standards for these programs and ensure that they are implemented in all Member States by offering citizenship and residence permits for investments. "
Although 'Golden Visa' schemes remain confidential, available data show that at least 6,000 passports and nearly 100,000 residence permits have been sold in the Union in the last decade. Spain, Hungary, Latvia, Portugal and the United Kingdom awarded the largest number, more than 10 thousand each.
The 'Golden Visa' plans generated around EUR 25 billion in foreign investment in all Member States over the last decade. "Cyprus has raised 4.8 billion since 2013, while Malta has managed to get around 718 million since 2014. Cyprus, Portugal, Spain and the United Kingdom seem to earn between 500 and 1 billion euros a year." According to the latest data, only last September, Portugal raised more than four billion euros.
Despite the large amounts involved, Cyprus and Portugal do not seem to question the source of wealth of the applicants. In Malta, candidates who have a criminal record or are under investigation may still be considered eligible under "special circumstances".
In Portugal, 95% of the total investment is in real estate, which has contributed to increase market pressure and little contribution to job creation. In Hungary, Latvia and the United Kingdom, candidate success rates reached 90%.
TI and Global Witness advise the Union to set general standards for the scheme, including greater diligence and transparency; identify and regularly assess the risks posed by the systems; seek to extend anti-money laundering rules so that they apply to all; establish mechanisms to coordinate information on requests, investments and rejections; and initiate legal proceedings against those Member States whose schemes may undermine collective security.