DUE DILIGENCE PROCEDURES ILL-ADAPTED TO RISK PROFILE OF APPLICANTS By their very nature, golden visa schemes are attractive to the criminal and the corrupt. The risk profile of applicants should demand the strictest of due diligence and the strongest measures to protect the integrity of EU governments and their officials.
In spite of the inherent risks associated with the high-risk profile of its applicants, a number of schemes operating in the EU have revealed alarming flaws in their architecture.
For the most part, authorities fail to routinely identify these risks. Recent scandals reported in the media suggest that in some EU countries, enhanced checks on applicants, their family members and the origin of their funds have not been adopted as standard procedure.
SHOULD EU CITIZENSHIP EVEN BE FOR SALE? Following the financial crash in 2008, the idea of developing a lucrative industry with low overhead was attractive to many Member States, and rightly so. Selling passports and permits has proved to be a rewarding business. The sale of EU passports accounted for as much as 5.2 per cent of Cyprus’s GDP in 2017; Portugal’s scheme has delivered close to €4 billion to the economy; and Malta enjoys a budget surplus partly because of its booming trade in residency and citizenship.
For some, these facts alone settle the question of whether citizenship and residency should be for sale to the highest bidder. For others, however, the industry smacks of unfairness. According to this view, a minority of Member States are reaping profit from jointly shared EU assets by hawking internal free movement and external visa-waiver agreements, and they are enjoying the spoils whilst exposing their neighbours to risk. Beyond the question of profit and its distribution, some believe that the schemes pose a threat to the meaning of citizenship itself. Many argue that citizenship is a public good, not a commodity for the open market. According to this school of thought, citizenship is an active duty and a critical building block in the development of a democratic community that should not be sold to the passive, footloose and mobile investor.
Whichever side may be right, one thing is certainly clear: the sale of citizenship – its profits, ethical implications and risks – affects all EU citizens. As this report shows, however, we remain woefully ignorant of how these schemes work, how our governments may be mitigating the inevitable risks that arise from selling mobility to the ultra-wealthy, and where their investment is ultimately going. The debate, however fierce, cannot advance toward productive results without transparency and consultation regarding the risks and rewards, for the EU, of selling citizenship and residency.
TRANSPARENCY INTERNATIONAL & GLOBAL WITNESS
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