Commodification of EU citizenship: Will the EU ban ‘golden passports’?

2022/05/16 Leave a comment

More on EU debates and tightening:

Europe is not quite the same since Russia’s invasion of Ukraine. European reaction to the war is in many ways strengthening the old seams of the EU project and, since its outbreak, one of the moral contradictions facing EU member states in recent years, the sale of citizenship, is now being tackled with much greater consensus.

Following the 2008 financial crisis, which hit southern European economies particularly hard, a number of countries, such as Portugal in 2012 and Spain in 2013, decided to set up schemes to enable the purchase of residence visas for “international investors”, that is, third-country nationals with sufficient purchasing power to secure the right to reside in the EU against payment, providing them with the key to full European citizenship within just a few years. Greece, Ireland, Italy, Malta and Cyprus soon went down the same route. They were followed not long after by the Netherlands, Bulgaria, Estonia, Latvia and even Luxembourg.

In countries such as Bulgaria, Malta and Cyprus, these ‘golden visa’ programmes, technically known as ‘residence by investment’ schemes (RBI), were accompanied by the so-called ‘golden passport’ programmes, which speed up the whole process and offer direct access to ‘citizenship by investment’ (CBI). After years of pressure from Brussels, Bulgaria and Cyprus have committed to ending CBI. Malta, however, has not, so it is still possible to buy an EU passport within a matter of a year.

“The main beneficiaries of both systems have been Chinese oligarchs and Russian oligarchs,” Spanish MEP and former justice minister Juan Fernando López Aguilar, who chairs the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs, tells Equal Times. In many cases, he insists, “they are mafiosi and corrupt individuals who launder the wealth, illicitly acquired in their countries of origin, by buying the privilege of residing in Europe and acquiring property in Europe, which has nothing to do with investment, and much less with creating jobs – all they have to do is buy mansions, yachts and real estate, which is what they do.”

RBI programmes were defended at the time as a way of attracting investments into countries such as Spain and Portugal.

“In both cases they were adopted at the time of conservative governments, which [against a backdrop of economic crisis] introduced legislative measures to, in practice, make money from granting residence rights, even though they are not linked to any actual investment and there are no checks on that investment. So we are clearly faced with issues that impact on European money laundering legislation,” the MEP summarises.

In October 2020, at the request of the European Parliament, the European Commission referred Malta and Cyprus to the European Court of Justice, alleging that their CBI programmes violated several fundamental articles of EU law.

The European Parliament also called on the Commission in March 2022 to prepare legislation banning ‘golden passports’ (CBI) across the EU and to set very strict conditions on ‘golden visa’ (RBI) schemes, with “stringent background checks” on applicants. And, adds López Aguilar, “with mandatory checks against all the databases shared by the EU-LISA agency, which reports regularly to the committee I chair, so that not only people who acquire this residence permit, but also all their direct first-degree relatives can be examined, and with the express obligation to consult and notify all member states, so that they can raise objections [on a case-by-case basis] to any person seeking residence in another member state.”

Investment migration and due diligence

These schemes are not, however, a European invention. There is a whole network of companies specialising in advising wealthy individuals interested in paying for a visa or residence permit in the 30 or so countries around the world that offer them, from small island nations in the Caribbean to economic giants such as the US, the UK and Canada, where the first such programmes were launched in 1986.

It is from Canada that Eric Major, the ‘father’ of the Malta Individual Investor Programme originally hails. Now a founding member and CEO of one of these firms – Latitude RCBI Consultancy – he assured Equal Times that these CBI schemes are a very useful tool for small or economically distressed countries, and that it would be senseless to disregard that.

Major defends the Maltese CBI scheme as an example of how best to regulate so-called “migration by investment”, a global market that generated 21.4 billion euros between 2011 and 2019 through CBI and RBI schemes.

“The US is still the country that approves the most ‘golden visas’ at around 10,000 people a year, while Portugal approved about 1,500 last year, Spain about 1,000,” says Major. “Depending on the size of the family being considered, the cost (of Maltese citizenship) will typically range between €900,000 at the low end, and €1.2 to €1.3 million.” It is “an injection to the National Development and Social Fund,” he adds, which finances “schools, roads and hospitals”. Malta, he explains, receives some 400 applications a year, of which around 250 are approved. “That is around 250 families; that means less than 1,000 people a year. And in the grand scheme of things, that’s 1,000 people who give on average a million euros each. So, you have an island nation that receives €200 million a year with this programme and that is particularly transformative for a small country, and all the more so in a post-Covid world.”

For Major, whose views are fairly representative of those of the Investment Migration Council, what MEPs are raising “are absolutely acceptable issues and need to be addressed”, as “some countries are doing better than others”. He argues that Malta offers an example of what could be satisfactory controls, which were inspired by practices in the banking sector. He refers to this as “four-tier due diligence”, whereby the state has to verify the good moral character of the applicants and the provenance of the funds provided through recourse to international banking databases, the law enforcement agencies of the countries in which they have resided and reports from firms specialising in data verification and risk analysis – all paid for by each applicant as part of the conditions of the programme.

For the European Parliament, however, this is not enough. “Malta and Cyprus keep in place these tools that are supposed to attract foreign investment but [they] have inevitably led to corruption and the laundering of illicitly obtained capital, without the slightest doubt,” says López Aguilar, who hopes that the ECJ will ultimately invalidate these programmes “based on their incompatibility with European law.”

For citizenship scholar Dimitry Kochenov, professor at the Institute of Democracy at the Central European University (CEU) in Budapest, the possibility of such a ruling is not so clear. As he explains to Equal Times, in Europe “citizenship has always been regulated, by default, at the national level, and there is no legal basis for regulating it at the supranational level”, so he does not believe that CBI programmes could be banned. “With residence, it is different, because there is a legitimate legal basis in the treaties by which the EU can legislate to harmonise residence rules and laws in the member states.”

Kochenov, himself a Dutch citizen of Russian origin, fears that the European Parliament’s measures against Russian beneficiaries of these programmes may be counterproductive. “The majority of the oligarchs on the sanctions list did not receive their European passports by investment, because there are plenty of other fully lawful ways,” he explains, as seen with Roman Abramovich, who became Portuguese based on his descent from the Sephardic diaspora. And then there are those who “have acquired citizenship in Europe, or the Caribbean, or elsewhere, because they wanted to escape Putin’s regime rather than support it,” such as Pavel Durov, the creator of the messaging app Telegram, who after refusing to collaborate with the FSB was able to flee Russia by buying citizenship of the Caribbean micro-state of Saint Kitts & Nevis. In 2021, he also acquired Emirati and French citizenship.

“To say that every person who comes from Russia and naturalises in the EU is potentially suspect ignores the simple fact that Russia is not a democracy” and that “many of the people who flee the country need to naturalise elsewhere because there is simply no other way”, so “naturalisation precisely enables their fight with the regime and their opposition to the war in Ukraine”, insists Kochenov.

López Aguilar believes that “this has to be filtered on a case-by-case basis, with all the guarantees required,” so that no one can make wrongful claims. The European Parliament’s intention is not to act against legitimate migration, but to close the door to international criminals and corrupt individuals who have been exploiting these schemes in the EU. And the war is acting as “an accelerant” in this regard, prompting the European Commission to strongly defend and adopt the EP’s proposals to strictly regulate ‘migration by investment’. “If we want to hurt Putin, we have to hurt the Russian oligarchs,” he concludes. “And if we want to hurt the Russian oligarchs, we have to put an end to this.”

Source: Commodification of EU citizenship: Will the EU ban ‘golden passports’?

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The Citizenship Problem | Essay | Zócalo Public Square

2020/05/15 Leave a comment

While his overall critique of the many inequalities intrinsic to citizenship is largely correct, no discussion of realistic alternatives (because there are none with the exception of the mixed success of the EU).

The more practical approach is to assess individual citizenship policies and practices as to their degree of inclusion or exclusion:

Why do we still cling to citizenship?

Certainly, it’s not required to protect your rights. We live in a world of human rights, where slavery is outlawed, gay people can marry, and thinking for yourself (rather than obedience to authority) is valued. So why, in societies based on the ideal of equal human worth, does citizenship still exist?

Citizenship is typically justified with romantic notions—self-determination, democracy, preservation of values. But at its core, citizenship is little more than a certain legal status within a certain legal system. By defining its rights and privileges as bound to a particular state, citizenship itself violates our cherished idea of equal human worth. Instead, citizenship is most effective at upholding caste systems both within and among nations.

In most cases, citizenship is granted more or less at random, based on where your family was from, or where you were raised. Public authorities grant citizenship; the actual citizen typically has no participation in the decision. Once granted, citizenship cannot be refused—or changed before obtaining some other citizenship, without the risk of becoming a “stateless” person, deprived of the rights of citizenship anywhere in the world.

Citizenship was created to legally proclaim equality among the haves and have-nots. It did not eliminate socioeconomic inequality; it merely explained it away through the incomplete promise of “one person one vote.” This made extracting obedience from the population easier and drove nationalism. Today, even the most awful political systems boast glorified citizenships.

For most of its history, citizenship has been useful for a very ugly reason. Citizenship allows us to ignore the basic tenets of the enlightenment—the presumption that humans are equal—without real argument. It is enough to say “She is not a citizen” to justify excluding someone from rights, entitlements, and respect.

For most of its history, citizenship has been useful for a very ugly reason. Citizenship allows us to ignore the basic tenets of the enlightenment—the presumption that humans are equal—without real argument. It is enough to say “She is not a citizen” to justify excluding someone from rights, entitlements and respect.

Citizenship, thus, can divide as much as it unites. We see that in the U.S. with DACA kids, the Dreamers, who are threatened with being thrown out of their home country because they lack citizenship. And America is not alone. Citizenship divides not only people within a nation, but confers unequal status based on the privileged status of some nations over others. Think of those who possess the all-entitling super-citizenships of nations of the global north, versus the limitations against people who come from former colonies—it’s clear that the status quo of citizenship is racist.

Racism is just one of the core building blocks of citizenship; sexism is another, as citizenship was routinely denied to women as well as minorities until well into the 20th century.

Citizenship is at a crossroads now: the dominant narrative that the global equality of human beings can be assured within states is in reality eroding. Different citizenships are not equal, and the allocation of citizenship rights worldwide is neither logical nor clear.
At the macro level, citizenship enables the perpetuation of rigid pre-modern caste structures. The son of an American is an American, and the son of a brahman is a brahman. We do not ask ourselves whether this is just.

To argue for citizenship at a micro level is utterly confounding and contradictory. Being a tenured professor is irrelevant to citizenship in Germany, but was crucial to securing immediate citizenship in Austria until 2008. “Being active in the diaspora” is irrelevant to Austrians, but can make you a Pole. Having a Lebanese mother is irrelevant to Lebanese citizenship, but having a Jewish mother, even without Israeli citizenship, can make you Israeli.

Examples of this disparity in the rules of citizenship are countless: what is taken for granted as best practice in one country can seem almost outrageous in another. But the contradictions should point us to the bigger problem with citizenship: there cannot be a “worse” or a “better” method of assignment to a caste. Any caste system depends on repugnant assumptions and should be intolerable, at least in modern democracies.

All citizenships are described often as equally valuable—even though this assumption is flawed. Equality of different citizenships would only work in a world where authorities could enforce standards of self-fulfillment and personal empowerment in every country. In such a world, citizenship would provide rights, not liabilities.

And in such a glorious world, citizenship would then be irrelevant.

But we live in a world where there are Pakistanis, whose citizenship is a global liability; they must hold a visa to travel to any other country, and hold no settlement rights abroad—and also Norwegians, who enjoy countless rights at home and can settle in more than 40 of the richest democracies without any formalities. In our world, citizenships do not have equal dignity. We are treated differently according to the color of our passport, and citizenship upholds random privilege. Look from Europe across the Mediterranean, or peer from the U.S. across the wall President Trump is building, and you see a world order where punishing randomness and hypocrisy reign.

The quality of our citizenship correlates very neatly with the global distribution of wealth. Most of the world’s people are losers of what prominent scholar Ayelet Shachar called ‘the birthright lottery.’ That is because they are denied the mobility and security that comes with a passport from an economically advanced nation and got their status at random. By controlling the borders between states, citizenship is the most important tool in the world to keep it that way.

Source: The Citizenship Problem | Essay | Zócalo Public Square

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The ‘Dark Side’ of Citizenship

2019/11/16 Leave a comment

Captures well some of the inherent discrimination of citizenship –who is in and who is not. Completely divorced from some of the practicalities and political realities undermining some of this discrimination but nevertheless an interesting and challenging interview:

Accounts of the glories and dignity of citizenship are everywhere, yet it is the arbitrariness, violence, and servility attending the concept that we must focus on when we interrogate it, argues Dimitry Kochenov, an expert on citizenship, nationality, and immigration law, in his book “Citizenship.”

1) One of the more popular politicians in our country often talks of “pull-effects” on immigration, claiming that allowing “too many” migrants or making the path to asylum or citizenship too easy increases the number of immigrants and refugees coming to our country. Is there any evidence for this? Additionally, and more controversially maybe: I hang with often radical people who are often very into open borders (or more precisely, claiming that borders shouldn’t exist). What’s your view on that?

Dimitry Kochenov: Having no borders is not really as radical as it might seem: We have this in the majority of modern democracies today (unlike the states in the past) — and even at the level of larger entities, offering free movement, which includes settlement and work rights to citizens of several countries at once. The EU or the GCC are great examples. Citizenship is thus not always about creating the borders — it can also be about, precisely, removing them. And on this count being an Icelander with dozens of countries welcoming you to stay is much better than holding a passport of Madagascar, opening zero doors for settlement and work outside of the country. Given that no borders works for the Icelanders and it is perfectly fine, to claim that it is outrageous and radical for the citizens of Madagascar seems somewhat unfair.

And concerning “too many” and “too few” immigrants, the world is too diverse to make easy generalizations — the “immigrant,” just like a “citizen,” is the creature of the law: if naturalizing is easy, immigrants are never in the majority. If naturalizing is virtually impossible, like in the Gulf, then everyone is suddenly an immigrant. This is exactly the totalitarian nature of citizenship at play: The persons themselves have zero say in the matter, while public authorities claim people right from the moment of birth (or later) and these claims cannot usually be refused.

2) Would you be able to summarize your suggested improvements or replacements for citizenship? Example: One of the advantages of citizenship is the fact that you can get a passport, which is a way for your home country to vouch for you. Absent citizenship, what mechanism would you propose to control travel across borders?

D.K.: This is a wonderful question, which takes the current shape of the world for granted: Borders are taken for granted, passports are taken for granted, just as the hostility to someone, who is not “from here.” This world, the world of nation-states, is quite new and will obviously not last forever. One of my main problems with citizenship, as I try to explain in the book, is that the idea of citizenship goes radically against all the core ideals our current notion of freedom, liberty and deserving are building upon. That this is the case had great reasons in the past. Citizenship as an absolute abstraction from the individual features of the bearer had to emerge when the core struggle was the struggle against caste systems in society: The vote of a baron had to count the same way as the vote of a peasant. The contemporary world, however, is radically different. The legal fiction — the absolute abstraction — which is citizenship has a difficult time when discrepancies between different citizenships in terms of the rights one can enjoy on the basis of these statuses are huge, while the status of citizenship as such is distributed purely at random. Consequently, from an instrument to guarantee and promote equality, citizenship emerged as the key tool of suppressing the idea of giving reasons to underpin the distribution of the most important rights. The question of “how can the world be without citizenship?” is thus a question, in essence, about how to stop distributing privilege at random, while using randomized distribution in order to impose glass ceilings and be legally allowed as well as morally safe to say “she is not a citizen, she has no rights, reasons do not matter.”

To come to the bottom of the question, the Schengen zone offers an excellent example of “mechanisms to travel across borders” — the borders are sometimes marked and crossed by speed train lines and wonderful highways.

From an instrument to guarantee and promote equality, citizenship emerged as the key tool of suppressing the idea of giving reasons to underpin the distribution of the most important rights.

3) Do you think the non-EU part of Eastern Europe will ever have a visa-free regime with the EU (I mean Russia, Belarus, Ukraine, etc.) in the same terms as there is within the EU right now?

D.K.: Borders, suspicions, and hatreds are policy choices. It is important to realize, however, that borders exist at different levels: These can be the boundaries for simple travel for a short-term stay (on this count Ukraine is already part, together with Moldova and Georgia of the larger European space); boundaries for settlement and work (on this count Ukraine is out, but Switzerland, Iceland, and Norway still are in); and the boundaries of citizenship, when the nationals of some countries would be excluded from the beginning. Take a national of the Turkish Republic of Northern Cyprus or South Ossetia, for instance. Such people are legally claimed by the entities too questionable to be palatable for the majority of the European nations, so they cannot even naturalize in the EU, should they meet all the conditions of the country of residence, with such documents.

To move closer to your question: Russia is currently the most atypical country in the world from the point of view of tourist and business visa policy, since it lets all the nationals of the poorer and less developed nations in visa-free, locking its doors behind a visa wall for Europeans and Americans. All the other countries are the exact opposite, offering visa-free travel to the citizens of richer and higher-developed nations. Picking friends is a matter of taste though, even if taste is peculiar. In the long term it would be illogical to keep the European continent cut by visa walls. The world, however, is frequently illogical.

4) What’s your take on abusive spouses that don’t let you leave, that is, states that make it extraordinarily difficult for people to renounce their citizenship?

D.K.: Not all the states refusing their citizens the right to renounce could correctly be compared to abusive spouses, it seems to me. The inability to renounce can definitely be an asset, a weapon against a different kind of abuse, when states of naturalization require the renunciation of previously held citizenships, thereby legally mandating a sacrifice of rights, which is difficult to justify. Both the inability to renounce and the obligation to renounce thus can be problematic. The core of the matter, of course, is whether the citizen herself can decide.

In the contemporary understanding of freedom and liberty, we expect to be able to make this kind of decision as we see fit. Yet, citizenship logic is quite different from the logic of liberty and freedom — since citizenship is a legal status attributed in the absolute majority of cases immediately following someone’s birth without any consent or ability to disagree with this attribution. A foreigner born to tourists passing through the U.S. is an American, however “incidental,” grandson of a Greek whose father has never visited Greece is of course Greek (and unable to renounce). The totalitarian logic of citizenship thus constantly clashes with our idea of freedom — and this is a constantly recurrent story, ultimately undermining citizenship’s justifications and annihilating its moral appeal.

5) Given that citizenship and ethnicity are often connected in the context of European nation-states, just look at Eastern Europe, should we be giving out citizenships to immigrants after a number of years compared to just some type of “long term residency”? What would be the advantages (if any) and disadvantages of that and how do you think the far right would react to such a move? Would such a move even matter in the EU?

D.K.: Citizenship and ethnicity is a difficult connection, since it breeds intolerance. In terms of equal human worth ethnicity is an irrelevant feature. Citizenship, as a status of legal recognition of full belonging to an authority cannot be made dependent on the color of someone’s eyes, or pigmentation of the skin. Nor only Eastern Europe, also many other countries and places not infrequently come with racist undertones in their citizenship policy. After all, citizenship has traditionally been a truly racist concept, since the Western empires dominating the world would not guarantee non-discrimination on this ground, often explicitly enforcing “whites only” policy. Their former colonies learned the lesson well — in Liberia one still needs to be a “Negro,” if I am not mistaken, to enjoy the status of citizenship. The official explanation, from the extreme right in Poland to the racist Liberian constitution, is always the same: social cohesion, culture and the like. Human culture is much richer, however, then policing the dispensation of liabilities based on the pigmentation of someone’s skin, and the developments of the second half of the 20th century allow us to trace a huge evolution on this count. The U.S., France, the Netherlands — formerly deeply racist countries as far as their citizenship policy was concerned, now play a totally different tune.

There is another side of this coin, which is not necessarily positive: Racist citizenship policy — that a Chinese or an Indian could not naturalize in the U.S.; that a woman marrying a colonial “native” in the Netherlands would lose her birthright Dutch citizenship, etc. gave way, with decolonization, to an essentially racist gradation of citizenship rights and liabilities around the world. Now that the former colonial subjects who used to have second-rate statuses in the Empires enjoy their own states, the citizenships those states distribute are often — in the majority of cases — steeply inferior in terms of the rights they bring to the citizenships of the former colonial masters. In other words, although individual citizenship outside of some African states are, by law, not any more racist, the world of rights and liabilities related to the different citizenship statuses in the world remains quite a racist place.

Source: The ‘Dark Side’ of Citizenship

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