Cyprus is abandoning a programme of granting citizenship to wealthy investors that had reportedly netted billions of euros over the years in the wake of a corruption row, reported AP.
Government spokesman Kyriakos Koushos announced on Tuesday the Cabinet had accepted a recommendation by minsters of the interior and finance to abolish the “golden passport” scheme, as of 1 November.
The decision had been based on the Cyprus Investment Program’s “long-standing weaknesses, but also the abuse” of its provisions.
The spokesman added that the Government would be exploring other ways of attracting foreign investment.
To Υπουργικό Συμβούλιο ενέκρινε την πρόταση των Υπουργών Οικονομικών και Εσωτερικών για κατάργηση του παρόντος επενδυτικού προγράμματος από 1/11/20. Η πρόταση βασίστηκε στις διαχρονικές αδυναμίες αλλά και στην καταχρηστική εκμετάλλευση που έτυχαν οι πρόνοιες του προγράμματος.
— Προεδρία της ΚΔ (@CYpresidency) October 13, 2020
The decision to shelve the scheme came hot on the heels of allegations that a top state official and a veteran lawmaker had been caught red-handed trading European citizenship for money.
The allegations were contained in an hour-long report The Cyprus Papers Undercover, by Al Jazeera’s investigative unit.
The unit is believed to have used hidden cameras to show parliamentary speaker, Demetris Syllouris, and lawmaker Christakis Giovanis promising “full support” to granting a passport to a fictitious Chinese investor, despite having been convicted of being a money launderer.
Giovanis subsequently denied allegations of corruption, claiming to have been aware of the “bogus” situation. He vowed he had played along to garner information so that he could file a report later with Cypriot law enforcement authorities.
Several weeks earlier, Al Jazeera released The Cyprus Papers, containing almost 1,400 leaked documents allegedly containing evidence that Cyprus granted passports to criminals convicted in their home countries and people wanted by Interpol.
The ensuing scandal triggered a huge backlash, with European Commission spokesman Christian Wigand saying the bloc’s executive body would decide whether infringement proceedings against Cyprus might be launched.
“We watched in disbelief how high-level officials were trading European citizenship for financial gains,” Wigand was cited as saying in Brussels, adding that “European values are not for sale”.
Speaker Syllouris made a statement on Tuesday, promising to step back from his duties as of next week until an investigation had been conducted.
Nevertheless, he slammed the “staged and fragmented” report which had tarnished his reputation.
Cyprus, which joined the EU in 2004, has been providing passports to non-EU nationals who make sufficient investments in the country, often through the purchase of property.
The citizenship-for-investments programme in Cyprus had gathered pace after the 2012-2013 financial crisis that brought Cyprus to the brink of bankruptcy.
The lucrative programme lured many foreigner investors, as a Cyprus passport automatically grants its holder access to the entire 27-member European Union.
Generating more than €7bln, the scheme allowed about 4,000 Cypriot passports to be issued to investors, while constantly hounded by allegations of corruption.
Eligibility criteria in recent years was reviewed after the Cyprus government conceded that “mistakes” had been made. Thus, in August, lawmakers adopted new vetting criteria, giving it the freedom to revoke the citizenship of investors found to be involved in grave crimes.
At present, a specially set up independent committee has been investigating thousands of applications that were made since 2007.
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