EU citizenship for sale as Russian oligarch buys Cypriot passport | World news | The Guardian

Speaks for the inherent corruption of citizenship-by-investment programs:

The Russian oligarch Oleg Deripaska has bought a Cypriot passport under a controversial scheme that allows rich investors to acquire citizenship and visa-free access to the European Union, the Guardian can reveal.

Deripaska, an aluminium magnate with connections to Donald Trump’s former campaign manager Paul Manafort, is one of hundreds of wealthy individuals who have applied for Cypriot nationality. His application was approved last year.

The revelations will revive concern about oligarchs with Kremlin connections buying EU passports. Large numbers of the Russian and Ukrainian elite featured last year in a list of hundreds of people granted Cypriot citizenship over the past four years.

The island also offered citizenship to Viktor Vekselberg, a major shareholder in the Bank of Cyprus, the country’s biggest bank, documents show. Vekselberg appears to have turned the offer down. His spokesman said he only had Russian citizenship.

Deripaska and Vekselberg appeared on another list issued by the US Treasury in January of oligarchs close to Vladimir Putin. Deripaska has denied claims that he served as a back channel between the Kremlin and the Trump campaign, as an investigation by the special counsel Robert Mueller into possible collusion continues.

The Cypriot documents seen by the Guardian and the Organised Crime and Corruption Reporting Project (OCCRP) show that Deripaska’s first attempt to become a Cypriot citizen was unsuccessful.

Cyprus has been accused of failing to vet passport candidates vigorously enough, heightening concerns in EU circles about people being able to buy EU citizenship. On this occasion, however, Deripaska was asked to resubmit his case because of a preliminary inquiry into his affairs in Belgium. The inquiry was subsequently dropped in 2016.

Cyprus’s council of ministers sent Deripaska’s case back to the island’s interior ministry, the Cypriot documents say, asking it to investigate further. The oligarch’s naturalisation bid had to be re-examined before a final decision could be made.

Deripaska’s name was made public this week when an interior ministry document listing beneficiaries of the collective investment scheme was distributed inside Cyprus’s parliament. Clerks left it in a room used by journalists, and several picked up a copy.

Leaked documents show that the Cypriot “golden visa” scheme remains a lucrative source of revenue for the island, generating at least €4.8bn (£4.3bn). Cyprus has given citizenship to 1,685 “foreign investors” since 2008 – many from the former Soviet Union, and from China, Iran and Saudi Arabia – and 1,651 members of their families.

The finance ministry has previously said it carries out stringent checks on all citizenship by investment applications, with funds required to undergo money laundering controls by a Cypriot bank. Cyprus is not the only EU country to have granted citizenship to high net-wealth Russians, it says. There is no suggestion of wrongdoing on the part of beneficiaries.

Vekselberg’s Renova group is one of Russia’s biggest conglomerates. He made a major investment in the crisis-hit Bank of Cyprus in 2014, buying almost 10% of its stock. The move at a time when the island’s economy was depressed meant he was an “exceptional case deserving of honorary naturalisation”, the documents say.

Vekselberg’s spokesman, Andrey Shtorkh, said: “Mr Vekselberg has only one citizenship, of Russian Federation and was never granted any other citizenship including Cypriot.”

Cyprus made it easier for rich foreigners to gain citizenship in September 2016. It had previously required investors to have at least €5m in domestic assets, including real estate, firms and government bonds. Applicants could also take part in a collective investment scheme by spending a minimum of €12.5m, or €2.5m per person. The ruling council reduced the eligibility threshold to €2m and ditched collective schemes.

The fresh trove of scheme beneficiaries obtained by the Guardian and the OCCRP confirms the extent to which Cyprus’s citizen-by-investment programme has become a main avenue for Russian oligarchs who wish to get a European passport.

The Portuguese MEP Ana Gomes described the visa scheme as “absolutely perverse, immoral and increasingly alarming”. The European commission launched its own inquiry last year into citizenship-by-investment programmes in the EU. The outcome is expected to be revealed later this year.

Cyprus, along with Malta, is one of the countries under scrutiny. “Cyprus is the biggest European investor in Russia and a great number of Russian nationals acquired Cypriot passports. We are all aware that there is also a big problem of recycling money. The point is that Cyprus, like other countries, is not just selling its passport. It is marketing European citizenship,” Gomes said.

Naomi Hirst, a senior campaigner at Global Witness, said EU states that sell citizenship should carry out “the sharpest of checks” on applicants.

“The source of wealth and background of these individuals should be scrutinised,” she said. “If not, then the whole of the EU could be made vulnerable to those who will use these schemes as a ‘get out of jail free card’ to move freely around Europe.”

via EU citizenship for sale as Russian oligarch buys Cypriot passport | World news | The Guardian

These are the countries you can ‘buy’ citizenship to – Business Insider

Another good overview of the various schemes, and the relative advantages for those shopping for citizenship:

Most countries offer citizenship (passports) the hard way. But 7 sell them outright, and 3 have “powerful” passports. “Citizenship Planning” is a thing.

For people who need a second citizenship and passport to dodge the long arm of their government, there is something called “citizenship planning,” similar to “financial planning.” But when it comes to just outright buying a citizenship and passport without having to languish for years as mere non-citizen resident, the Huddled Masses need not apply. And not any passport will do. In fact, there are only three for sale that are really good.

Which are the best passports to get?

There are quality standards for everything, especially if it’s costly. The most powerful passports are those that allow visa-free travel to the most countries.

There are other considerations, for example those that drive US citizens nuts when they live overseas, due to the US government’s onerous reporting requirements on them and on banks that do business with them, and due to US taxation of their worldwide income no matter where they live. Few other governments treat their citizens that way.

In terms of visa-free travel, here are the 25 countries with the most powerful passports, according to a new ranking by Henley & Partners, which is into “citizenship planning.” But among them is only – Austria – one whose citizenship can be bought (more on that in a moment):

  1. Germany: visa-free travel to 176 countries.
  2. Sweden: 175 countries
  3. Denmark, Finland, Italy, Spain, and the US: 174 countries.
  4. Austria, Belgium, France, Luxembourg, Netherlands, Norway, Singapore, UK: 173 countries
  5. Republic of Ireland, Japan, New Zealand: 172 countries
  6. Croatia, Greece, Portugal, Switzerland: 171 countries
  7. Australia, South Korea: 170 countries
  8. Iceland: 169 countries.

And how do you get one of those passports?

In most countries, the hard way: Legally immigrate and obtain residency, and then fulfill the residency requirements to get citizenship and that second passport, which takes years. Most countries, including the US, have special programs for “investors” to obtain residency, such as a green card, essentially on the spot, but even then it takes years to obtain citizenship and a passport. If it’s possible at all, such as in Germany.

Then there’s the direct way: Buy a citizenship and the passport that comes along with it. These citizenship-by-investment programs are not for folks on a tight budget. According to Henley & Partners, only seven countries offer this convenient route, only three have powerful passports, and only one is in the top of the heap above.

Passports from EU countries are the best. If you’re from Russia or China or Iraq and become a citizen of one of the 28 EU countries, you’ll get a country-specific EU passport that allows you to live and do business anywhere in the EU. There are all sorts of offshore benefits. And travel around the world is a breeze.

But citizenship in most EU countries is not for sale. You can buy only residency, similar to programs in the US. But there are three exceptions:

Austria

Citizenship is almost impossible to get for normal foreigners already legally in Austria. But the super-rich and famous have a way. The government, through paragraph 10, section 6 of the Citizenship Act, can confer citizenship “because of the services already provided by the foreigner and the extraordinary achievements still to be expected of him in the special interest of the Republic.” This usually involves a big direct investments of unspecified magnitude plus some other “extraordinary” contribution, such as being famous or creating jobs. Few succeed. In some years, none succeed.

They’re playing hard to get. But the rewards are huge for the few that succeed, including an impeccable EU passport with visa-free travel to 173 countries.

Cyprus

In 2012, as the EU-part of the divided island was veering toward bankruptcy, it offered citizenship through a “fast-track” scheme to dodge the normal residency requirements. But the price tag was €10 million in direct investment. Too expensive for the average oligarch.

In 2013, Cyprus became desperate. Its offshore financial industry, the main breadwinner of the economy, had collapsed in a cesspool of corruption. The banks had taken much of the foreign money – particularly Russian money – down with them. Cyprus needed some moolah. It slashed the price of citizenship to €3 million of direct investment. Russians who’d lost at least €3 million in the collapse would also be eligible for citizenship.

Since then, the price was further slashed, to as low as €2 million. And it’s fast: about three months for citizenship and an EU passport, with visa-free travel to 159 countries. And that €3-million investment can be sold after three years. An adequate house would likely do.

Malta

The tiny EU member state with 417,000 residents spread over three islands is convenient for foreigners, with English being one of the two official languages. In 2013, during the still rough waters of the euro debt crisis, Parliament passed legislation that put Maltese citizenship up for sale at €650,000. A spouse costs another €25,000; unmarried children between 18 and 25 and dependent parents cost €50,000 each. There are no residency or investment requirements. The money goes into government funds.

This citizenship is a product to be marketed. If it sells 100 per year at €650,000 a pop, it would generate annual revenues of €65 million – or 1.75% of total 2016 revenues (€3.7 billion). Given the limits on budget deficits under EU Treaties, everything counts.

This Maltese product includes an EU passport with visa-free travel to 166 countries. Folks can stop by, jump through some bureaucratic hoops, pay, get their citizenship and passport, and settle in Germany or wherever. At the time, Simon Busuttil, leader of the opposition Nationalist Party, warned that Malta could end up being compared to shady tax havens in the Caribbean. And that’s our last stop.

Source: These are the countries you can ‘buy’ citizenship to – Business Insider