Immigration: European Commission Reports on Risks of Investor Citizenship and Residence Schemes in EU

Immigration: European Commission Reports on Risks of Investor Citizenship and Residence Schemes in EU

Did immigration issues drive us to Brexit? What is the word on the streets right now?

European Commission Reports on Risks of Investor Citizenship and Residence Schemes in EUThe European Commission has presented a report on investor citizenship and residence schemes operated by a number of EU countries. The report, presented for the first time, identifies the risks coming from such schemes for security, money laundering, tax evasion and corruption.

The report, which also outlines some steps to address these concerns, comes after an analysis published last year by anti-corruption organization Transparency International. The analysis concluded that the Golden Visa schemes are a gateway to Europe for corrupt people and money laundering.

According to the EU Commissioner for Migration, Home Affairs and Citizenship Dimitris Avramopoulos, legal residence in the countries of the EU and the Schengen territory comes with rights and privileges that should not be abused.

“Member States must at all times fully respect and apply existing obligatory checks and balances – and national investor residence schemes should not be exempt from that. The work we have done together over the past years in terms of increasing security, strengthening our borders, and closing information gaps should not be jeopardized. We will monitor full compliance with EU law,” Commissioner Avramopoulos said after the report was presented during a meeting of the commission.

The EU Commissioner for Justice, Consumers and Gender Equality, Věra Jourová also said in front of the Commission that there should be more transparency on how nationality is granted and more cooperation between the EU members.

“Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market. People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States. There should be no weak link in the EU, where people could shop around for the most lenient scheme,” she said.

Risks Coming From Investor Citizenship and Residence Schemes in EU

In the EU, Bulgaria, Cyprus and Malta are the only countries granting investors with citizenship without the obligation of physical residence. According to the Commission, such scheme may pose risks for security, money laundering, tax evasion, as well as lack of transparency.

As per the investor residence schemes, they are currently run in 20 EU countries: Bulgaria, Czechia, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia and the United Kingdom.

Differently from the citizenship scheme, the investor residence is a three-year visa that leads to citizenship. However, the scheme poses the same risks as the previous one. According to the report of the Commission, there is a lack of information on how the member states approach security concerns when granting applicants with residency.

Commission Outlines the Steps that Need to be Taken to Address These Concerns

The commission has presented the necessary steps that need to be taken by the member countries to address these risks.

  • All obligatory border and security checks are carried out systematically
  • The requirements of the Long-Term Residence Permit Directive and the Family Reunification Directive are properly complied with
  • Funds paid by investor citizenship and residence applicants are assessed according to the EU anti-money laundering rules
  • In the context of tax avoidance risks, there are tools available in the EU framework for administrative cooperation, in particular for exchange of information

A group of experts from the EU countries will be established, who will be tasked with:

  • Creating a system of exchange of information and consultation on the number of applications receive, the applicants’ country of origin, and the granted or rejected permits based on investments
  • The development of a common set of security checks for investor citizenship schemes, including specific risk management processes, by the end of 2019.

The investor citizenship schemes and investor residence schemes have been widely criticized by anti-corruption organizations and citizens in the EU, who have called them “a gateway to Europe for the corrupt and criminals”. However, none of the countries has surrendered to this criticism and pressure.

Only recently Portugal has turned down a bill proposed by the opposition parties to abolish the Golden Visa investor residence scheme.  Instead, the MPs voted pro the widening of the scheme by adding a new category called “green visas”

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