Cyprus Mail 10 June 2020 - by Jean Christou
The cabinet on Wednesday approved regulations to the citizenship by investment programme, which it says ties the scheme to anti-money laundering legislation.
Interior Minister Nicos Nouris said the regulations would be sent urgently to the cabinet.
Nouris said the linking of the scheme to anti-money laundering laws, was an important provision which would help in the execution and examination of applications for the so-called golden passports.
“Another feature of the new programme is the tightening of regulations, so that there is a revocation of the granting of citizenship in a clear way,” the minister said, “as in cases where it was found that a candidate for naturalisation was either involved or has been convicted of a serious crime.”
He said the government had previously “encountered some difficulties” in revoking passports.
Financial criteria to secure citizenship will remain the same, Nouris said. This involves a €2m investment plus the purchase of a house worth €500,000 plus VAT. “We have made it possible for alternative investing options for those who will join the programme such as participating in businesses or participating in Cypriot companies by acquiring share capital,” Nouris said. Candidates must also give €75,000 towards the government’s housing policy and the same amount research and innovation foundation for the development of innovative business activities.
“Together with decisions already taken by the Council of Ministers last year, we have made the Cypriot investment programme extremely reliable with very robust and strict criteria,” said Nouris.
“This is being supplemented today with regulations that will make it no longer possible, after some in the past have made a mockery of the programme, to question the credibility of the programme that the Republic of Cyprus has established”.
“We believe that by introducing the interconnection between the programme and the laws the central bank itself uses against money laundering, we are adding a new layer to the scheme,” the minister said.
Earlier this year, a European money laundering watchdog cautioned that the secretive investment-for-passports programme run by Cyprus was vulnerable to money laundering and fraught with risk.
The Council of Europe’s anti-money laundering body MONEYVAL called on the Cypriot authorities to pursue more aggressively money laundering from criminal proceeds generated outside of Cyprus, and take a more proactive approach to the freezing and confiscation of foreign proceeds.
The report said the risks related to the Cyprus Investment Programme had not been assessed comprehensively, and the body recommended that Cyprus conduct a comprehensive money laundering and terrorist financing risk assessment of the programme.
Cyprus launched the scheme offering passports for an investment in 2013, with more than 3,000 people gaining citizenship through the programme. MONEYVAL, said that, although Cyprus had broadly taken measures to mitigate key money laundering risks, the risk of vulnerabilities in the investment programme had increased “exponentially” via real estate, the investment vehicle of choice.
Last November, the government announced it would start procedures to strip the citizenship of 26 individuals following revelations that passports had been granted to a suspect Malaysian businessman, persons tied to Cambodia’s authoritarian government and a Kenyan billionaire under investigation for tax evasion by the authorities in Kenya.
Nouris said the decision to operate the investment programme, like any such investment programme in an EU country, “is an inalienable right of the nation-state and its national legislation”.
“What we as a member state have done is to inform the EU, and in fact we have exhaustively presented the provisions and criteria of our programme because we have nothing to hide, but more than that we want to do away with these rumours surrounding the programme that Cyprus had abused this scheme. There is no such thing,” Nouris said.
He added that the government had already set a maximum of 700 naturalisations per year. He said this was not the right time to reassess that number due to the economic fallout from the coronavirus pandemic.
