EC Report Outlines Risks of Investor Citizenship Schemes

The European Commission outlines the risks associated with  investor citizenship and residence schemes operated by a number of EU Member States in a report, released on Wednesday.

The report maps the existing practices and identifies certain risks such schemes imply for the EU, in particular, as regards security, money laundering, tax evasion and corruption. A lack of transparency in how the schemes are operated and a lack of cooperation among Member States further exacerbate these risks.

According to the report, three Member States, Bulgaria, Cyprus and Malta, currently operate schemes that grant investors the nationality of these countries under conditions which are less strict than ordinary naturalisation regimes. In these three Member States, there is no obligation of physical residence for the individual, nor a requirement of other genuine connections with the country before obtaining citizenship.

The report observes that checks run on applicants are not sufficiently robust and the EU's own centralised information systems, such as the Schengen Information System (SIS), are not being used as systematically as they should be.

Also, the report finds a lack of clear information on how the schemes are run, including on the number of applications received, granted or rejected and the origins of the applicants. In addition, Member States do not exchange information on applicants for such schemes, nor do they inform each other of rejected applicants.

The Commission will establish a group of experts from Member States to improve the transparency, governance and the security of the schemes.

It emerged on Tuesday that Bulgaria is preparing to end the award of citizenship by investment.

European Commissioner for Justice Vera Jourova told a news conference in Brussels that she had been  notified of this decision.

Wednesday's report follows the European Parliament resolution of 16 January 2014 which called on the Commission to look into the  various national citizenship schemes in the light of European values and the letter and spirit of EU legislation and practice.

Source: BTA