EU CITIZENSHIP FOR SALE

By Eleonora Pizzini, 8,5 minutes

In a Tweet from 2020, EU Justice Affairs Commissioner Didier Reynders made it clear that “European Values are not for sale”. However, some EU countries still offer this opportunity to third-country nationals.

Acquiring the citizenship of one of the EU’s Member States is usually a long and complex procedure for any foreigner, and it implies different steps according to the single Member States. The most acknowledged ways to get European citizenship are by descent or by naturalisation. Naturalisation is usually the most common case: after living and working stably in a specific country, a person can submit a request to obtain the nationality of said country. This path usually requires on average at least 10 years of living in the state and there may be additional requirements, such as taking a test, an oath, or minimum levels of income. Nationality by descent, instead, requires the applicant to present proof that one of their ancestors was an EU citizen and did not give up, nor lose the right to, their nationality. In this case, people can apply by submitting the necessary documents to the closest EU mission abroad (e.g. an embassy or consulate) and it will take, on average, between six months and one year to get an answer.

Both these methods are available in all 27 Member States and, of course, people could also become citizens because of marriage to an EU citizen. Yet, in this case there are also specific rules and procedures to follow to prevent fraud. What is evident from these possibilities is that everyone applying for citizenship to a specific country must have a clear and strong relationship with that state. However, a fourth, less-known option is also available for more wealthy foreigners. The procedure of granting so-called Golden Passports or Golden Visas has recently become criticised also in light of the developments between Russia and Ukraine.

What brought the problem into the spotlight?

In September 2020 Ursula von der Leyen gave her first State of the Union Speech, in which she underlined the importance of solidarity and unity among Member States. Recalling her words, one month later several MEPs raised, during a plenary debate with the new Justice Commissioner, the urgent need to stop EU Member States that granted those procedures. Part of this urgency was also motivated by the first-ever Report from the Commission on Investor Citizenship and Residence Schemes in the European Union. The report stressed how, until that point, these types of permits inevitably allowed money laundering, tax evasion, and corruption. The major countries under review from the Commission were: Malta, Cyprus, and Bulgaria. Following the European Parliament session and because of the report, the European Commission consequently also opened infringement procedures against Cyprus and Malta.

Golden Visas

It has to be said that there are some differences between Golden Visas and Golden Passports. However, the two are usually associated, and different sources generate great confusion on what the two procedures are by mixing them up. So, first of all, what are Golden Visas?

This type of scheme is offered by the following EU countries: Austria, Belgium, Bulgaria, Greece, Ireland, Italy, Malta, Portugal, and Spain. It consists of a substantive investment done by third-country nationals that usually involves capital transfer, real estate acquisition, or a donation. Depending on the single state concerned, this could mean that individuals are required to buy real estate properties, state bonds, or, in certain cases, also create or invest in a private company. Golden Visas are also usually less expensive than Golden Passport schemes, with certain countries requiring a minimum investment of “just” €250,000.

The timeframe to obtain Golden Visas varies a lot between Member States, but fluctuates from three up to six or seven months on average. A Golden Visa usually lasts one year, and applicants may request a second Visa lasting two years – or in certain cases five – after the first one. Yet, only if they respect certain conditions, such as, for example, visiting and staying in the state for a minimum period during the first year.

In essence, Golden Visas grant a residence permit to an individual, and their family, if the person has a clear criminal record in their native country and could eventually lead to citizenship by naturalisation. Hence, even if this scheme does not formally require applicants to constantly reside in the country, if they want to apply to become an EU citizen, they still will need to do so. What is possible, though, is that the number of years normally required by the single state to reside in it can be less than the standard ones. Nevertheless, the aforementioned additional requirements, such as testing the knowledge of the language or the culture of the country, taking an oath, or other types of formalities, are still required.

Golden Passports

Golden Passports, instead, are what can be defined as the real problem. This type of scheme is granted just by three countries: Cyprus, Malta, and Bulgaria. Or better, it was, since as of today both Cyprus and Bulgaria stopped the procedure of offering this type of passport after pressure by the EU Commission. Hence, Malta remains the only country that still offers this opportunity.

MEPs and EU Justice Affairs Commissioner Reynders were addressing this second practice in particular in their speeches. In August 2020, Al Jazeera was among the first newspapers to publish a full investigation on to whom these passports and nationality were given in Cyprus. As a result, Cyprus stopped granting the Golden Passports in October of the same year. Among the 1400 requests Cyprus received between 2017 and 2019, 5% of those turned out to be submitted and granted to individuals either currently under criminal investigation, that already served time in prison, or to influential politicians and people holding public state positions, allowing for potential bribery and money laundering. Some of those citizenships were eventually revoked; however, the process of overturning a nationality is not easy and may take a lot of time. 

Famous names that appeared in the investigation were: Nikolay Gornovskiy, former board member of Gazprom, the Russian public-owned gas company. When Gornovskiy was granted citizenship in 2019, he was currently accused and convicted of corruption and abuse of power in the Federation. Mykola Zlochevsky, former Ukrainian minister of ecology and natural resources under the corrupted government of Viktor Yanukovich, was also granted Cypriot citizenship. Generally speaking, the number of businessmen, politicians or high-level figures to whom citizenship was granted despite their questionable and illegal past is high, and in the majority of cases they were convicted for money laundering or corruption.

But what are exactly the differences between Golden Visas and Golden Passports? And why are Golden Passports a threat?

Let us go step by step: Golden Passports are also a scheme to obtain an EU passport in return for an investment. Citizenship is, in any case, not instant; however, a major point of difference between Golden Passports and Golden Visas, or the standard requirements needed for acquiring citizenship by naturalisation, is that in the first case candidates do not need to reside in the country, almost at all to be granted citizenship, nor do they need to work in the country. The ways through which people can apply, and the requirements, are similar to those presented for Golden Visas. However, the minimum amount of capital invested at the beginning is normally higher at around 1 million euros. Moreover, the standard requirements necessary when applying for  citizenship by naturalisation fall.

The procedure, therefore, lacks basic legal standards set by the Member States and the EU to legally obtain a nationality: the scheme lets third-country nationals receive European citizenship without a genuine link with the naturalising country. Additionally, the Commission encountered a lack of strong background checks on candidates and on the procedure’s methods. The reason why in countries such as Malta, Cyprus, and Bulgaria it was possible to obtain  citizenship by investment is that the scheme contributed substantially to the country’s economy. While Bulgaria just partially benefitted from the procedure, Cyprus and Malta were actually the two countries that gained the most out of them. 5% of Cyprus’s GDP since 2013 was raised via Golden Passports - ca. €4.8 billions -, while Malta was able to account for 2.6% of its GDP just for the single year of 2017. This is also the reason why, as of now, Malta is the only country that has “paused” the programme, but is reluctant in removing it completely.

The current situation

Al Jazeera’s investigation pointed out that the majority of applicants asking for a Golden Passport were wealthy Russians, Belarussians, Chinese, and Ukrainians. With the ongoing attack from Russia on Ukraine, the EU imposed on Malta a block on new applications. Nevertheless, this reality allows for some reflections.

First of all, it has already been pointed out that these procedures sell citizenships and values, which is not what the current Commission, nor EU citizens, want. 

Secondly, Malta stopped the application process for Russian and Belarussian citizens on the 2nd of March 2022. The aggression of Russia to Ukraine can be said to have started on the 24th of February. For applications submitted to the Maltese authority between the two dates, there is still, potentially, the possibility that the country is going to accept individuals in favour of the Federation aggression, but who conveniently applied to elude EU sanctions. In fact, Malta stopped new applications, but older ones still appear to be “under process” and not blocked. The possibility that many wealthy Russians applied for Maltese citizenship cannot be excluded.

Lastly, it is generally an élite group of people who is able to pay the price to have access to these systems. Usually, this kind of people come from countries at war or that benefit from poverty in developing countries. In the majority of cases, individuals applying for Golden Passports are looking for an easy way to obtain a second nationality and enter without problems in the European Union despite possible sanctions. Additionally, in many cases these individuals are also looking for a way to not be extradited to their native country once they are convicted for a crime.

This is of course against European values and poses a threat not only to European citizens, but also to the European economy. As there seems to be no added value, nor benefit in granting these types of permits, as underlined by the EU, the procedures just pose “ethical, legal and economic concerns and several serious security risks” and should simply be stopped.