EC’s Golden Visa report, current checks clearly are insufficient

The European Commission has told EU states to tighten checks on Golden Visa applicants and will closely be monitoring governments that offer the schemes to non-EU nationals who may use the system for tax evasion and money-laundering.

EU citizenship gives an individual free movement in most of the EU, easy access to the single market and other rights and with 20 countries involved, wealthy foreigners are able to buy their way into residency and unrestricted Schengen area travel, laying the foundations for the granting of passports.

The investment required to obtain Golden Visas ranges from €13,500 in Croatia to over €5m in Luxembourg and Slovakia.

Despite strong concerns, the Commission has decided only to set up a dedicated team to monitor the Golden Visa schemes and to insist on an increase in information-sharing.

Global Witness said the Commission had flagged up the problem but had not offered any solutions with applicants able to acquire citizenship in some countries without actually residing there.

The Commission says the schemes’ publicity often trumpet the benefits of EU citizenship, such as the right to free movement, in order to attract rich investors. with around €25 billion being spent in the past ten years.

“We want more transparency on how nationality is granted and more co-operation between member states. There should be no weak link in the EU, where people could shop around for the most lenient scheme,” said the EU Justice Commissioner, Vera Jourova, adding that Golden Visa applicants, “must have a genuine connection to the member state concerned,” an aspect that notably is absent, currently.

The Commission says it has several areas of concern:

• Security: 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 systematically enough
• Money-laundering: extra checks – called “due diligence” – are necessary to ensure that EU rules against money-laundering are not avoided
• Tax evasion: monitoring and reporting is necessary to make sure that individuals do not exploit these schemes in order to gain tax advantages
• Transparency and information: there is 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; EU states are failing to inform each other about applicants

“Under none of the three investor citizenship schemes is comprehensive information available about the identity of people who successfully obtain citizenship on the basis of investment, and their countries of origin,” the Commission report says.

Portugal’s government stubbornly has refused to reveal the names of successful Golden Visa applicants, thus increasing the suspicion that some would be considered undesirable if their identities were available for analysis.