The curtain fell today on the much-praised case of the "golden passports", five years after the publication of the Al Jazeera report, with the Permanent Criminal Court of Nicosia acquitting the accused. By decision of the majority of the three-member composition of the Permanent Criminal Court of Nicosia, the former Speaker of the Parliament Dimitris Syllouris and the businessman and former MP Christakis Tziovanis were acquitted of all charges they faced.

The hearing had begun in 2022 and concerned cases arising from the investor naturalization program, which was the focus of international criticism after the release of the relevant material in 2020. The court ruled by majority that the charges against the defendants were not substantiated, leading to their complete acquittal. At the same time, Judge M. K. Loizou dissociated herself from her position and ruled that she would convict the two in the 3rd charge and acquit them in the 1st and 2nd.

The two of them faced three charges for two offenses: 1) The offences of influence trading in violation of Articles 2, 4, 5, 6 and 9 of the Council of Europe Convention on the Criminalisation of Corruption (Ratification) Law of 2000, Law 23(III)/2000 (as amended by Law 22(III)/2012, and Article 12 of the Council of Europe Convention criminalising Corruption and Article 20, of the Penal Code, Chapter 154 ("Penal Code") (categories 1 and 3); and (2) conspiracy to defraud in violation of Articles 302 and 20 of the Penal Code (category 2).

As reported by the Bench, the trigger for the investigation of the case was the publication of the international news network "Al Jazeera" a video related to the Cyprus Investment Program (hereinafter "KEP"), however the charges they ultimately faced are not related to it, as "the video in question did not constitute testimony before the Court nor can any judicial knowledge be drawn as to its content".

Defendant 1 was the then Speaker of the House of Representatives (hereinafter referred to as the "PtB") and defendant 2, the MP, and in the context of the trial, a number of naturalizations involving companies of the interests of defendant 2 were investigated, with the Prosecuting Authority promoting accusations in relation to the naturalization of two investors.

Extensive reference was also made to the case of Andreas Pittatzis, for whom the charges were withdrawn, with the Bench referring to the history that led to the suspension of the case against him.

In the decision, the judges focused on the fact that there are no essential witnesses for whom no explanations were given by the prosecution, while there was talk of messages exchanged by Andreas Pittatzis with an investor and a witness, which were not submitted to the court.

The lengthy 170-page decision records in detail the points that the majority took into account in the acquittal decision.

What was not proven - Reason for investigative gaps

According to the decision, for the purposes of category 1 according to the details of the offense, it should be proven that the two defendants:

(1) between October 2017 and February 2019, in the District of Nicosia and the District of Famagusta;

(2) accepted by the AHA;

(3) the granting of an irregular advantage, i.e. the obtaining of an economic advantage;

(4) for themselves and/or for the benefit of Nissini Ltd, Lanuza Ltd and Fidescorp Ltd;

(5) to exert improper influence over a public official,

(6) so that he/she proceeds to an act or omission related to the exercise of his/her duties for (a) acceptance of submission and (b) acceleration of the examination of an application for the achievement of the exceptional naturalization of the foreign ZA, as a Cypriot citizen, without meeting the requirements of Law 141(1)/2002, as well as the criteria established by the MoS, for this naturalization.

The majority of the judges state that they have taken into account what the Prosecution said in its speech, however it records that the following points of its recommendations have not been proven:

  • "The position of MK 9 (category 9 witness) that AHA turned to Fidescorp Ltd because he was not satisfied that the registration of ZA's application could not be accepted before his naturalization was approved and before she turned 28 years of age. From the testimony before us, it became clear that AHA had made other investments with another company which, according to a representative of the company of MK 9, could be considered for its benefit. This aspect has not been clarified. It was therefore not clear under what circumstances the AHA instructed Fidescorp Ltd to forward his daughter's application.
  • The circumstances under which the acceptance of the application was initially accepted are not those suggested by the Prosecuting Authority. Both witnesses, MK 11 and 13, denied that any undue pressure was exerted by any person. Nor did they remember to mention anything specific. Only the cover letter from Fidescorp Ltd, which MK 13 approved, remains. The detour, as stated by MK 13, was within his discretion for humanitarian reasons. The same goes for acceleration.
  • The references to "pressure phone calls" and a reference to an email from MK 11 would be relevant if they were accompanied by a specific reference to what they constituted. A telephone conversation in which someone asks for information on the progress of an application is not unfair in itself. There must also be an intention to corrupt. In this case, there seems to have been some delay on the part of the Ministry of Finance, which asked for clarifications on the financial aspect of the operations, issues that were managed by the Office of MK 9 and not by Fidescorp Ltd.
  • Although the extent to which the undue influence was ultimately exercised is not a component of the offence, it is an indication or evidence which, cumulatively with others, could demonstrate the agreement to sell influence. In the present case, it does not appear to have been influenced since the application was assessed as it was.
  • The appointment of Fidescorp Ltd, and the relationship of defendants 1 and 2 with each other, do not in themselves lead to the conclusion that they were the recipients of unfair consideration from the AHA, which is accused of active influence trading. From the testimony before us, companies of the interests of defendant 2 had already received consideration for the sales to AHA. The application for naturalization of the AHA and the rest of its dependents no longer concerned them. We note here that AHA had invested in other properties that were not related to companies of defendant 2 and which may cover a new investment for the purposes of naturalization of ZA.

(6) The communications of defendant 1, through his private hearing, and bearing in mind that the questions revolved in the course of the application, cannot, without a doubt, lead to the conclusion that he was selling influence to the AHA for the benefit of his former son-in-law. The Court's finding that AHA turned to Fidescorp Ltd because defendant 1 would help, based on the facts before us, would be a conjecture. The Convention does not prohibit all communication, even if it is institutionally reprehensible. It prohibits the receipt of consideration for the purpose of unfair influence. The existence of the "authorization" of the President of the Republic to promote foreign investments, as much as it raises institutional questions, calls into question the position that defendant 1 acted with the intention of corruption and in exchange for consideration."

Therefore, the court held that category 1 has not been proven.

For the purposes of category 3, according to the details of the offense, it would have to be proven that the two defendants:

(1) between January 2019 and June 2019 in Nicosia;

(2) accepted by NG;

(3) the granting of an irregular advantage, i.e. the obtaining of an economic advantage;

(4) for themselves and/or for the benefit of other persons, namely GG Virgin Rosa Ltd and Zhitang Bigbang Company Ltd;

(5) to exert improper influence over the Director General of the Ministry of the Interior, a public official;

(6) in order for him to carry out an act or omission related to the exercise of his duties in order to achieve the exceptional naturalization of NG, as a Cypriot citizen, (a) without issuing a residence permit in the Republic of Cyprus and (b) without meeting the requirements of Law 141(I)/2002, as well as the criteria established by the MoS, for this naturalization.

In relation to category 2, that of conspiracy, the Prosecuting Authority had to prove that:

(1) Defendants 1 and 2, between January 2019 and June 2019 in the District of Nicosia and Famagusta,

(2) conspired with each other, such as by fraud or other fraudulent means, to defraud the Republic in order to achieve the naturalization of NG,

(a) without the issuance of a residence permit in the Republic of Cyprus and

(b) without meeting the requirements of Law 141(I)/2002, as well as the criteria established by the MoS.

The judges state that the Prosecuting Authority, in its speech, made suggestions as to the testimony which, according to its position, leads to a conclusion of guilt of defendants 1 and 2. As they note, they examined her positions with particular attention and on the basis of the evaluation of the testimony set out above, however they consider that these accusations have not been proven either.

And they explain:

  • "The case of the Prosecuting Authority had two axes. NG would make a purchase in order to achieve the permanent residence exemption in which case the money he transferred to a customer account of the Supreme Court (Andreas Pittatzis) was not paid to the companies of interest of defendant 2. He therefore falsely presented himself with certificates that the amount had been paid. Defendants 1 and 2 unlawfully undertook to achieve the exemption requested so that the sale would not be wrecked.

(2) The Prosecution links the intentions of NG and Defendant 2 to the "Reservation Agreement" (Exhibit 24). The assurance that there is a possibility of securing the exemption troubled us. But this in itself does not prove reprehensible behaviour. From the wording of the agreement it is not obvious whether another one followed. The question arises as to why the Prosecution wished to submit another agreement as Presumption 96.

What can be said with certainty is that the final sales agreements did not contain such a term and that it was explicitly stated that the amount had been paid.

  • As we have accepted, the price had indeed been paid to an account of the Supreme Court with NG as the beneficiary. However, the money was under the control of the Supreme Court and had been deposited for the purpose of purchasing the specific investment. A transfer or a new remittance for another purpose would require new supporting documents. Furthermore, it is accepted that the amount was paid after naturalization. We mentioned above the gap created by the non-presentation of testimony by officials of the Ministry of Finance. We cannot know how they decided, since they had before them the deposit in a customer account. We therefore have no testimony of what would not be acceptable on their part in meeting the economic criteria.
  • From the testimony before us, and in particular of MY 3, it also became clear that the payment certificates were requested and issued on the initiative of the lawyer AP, who allegedly acted as an attorney of NG and as a lawyer for the companies of defendant 2. His actions have certainly not been associated in any way with defendant 1. We have also accepted that defendant 2 had signed the certificates because former defendant 3 was absent that day.
  • As regards the correspondence to obtain the exemption, none of MKs 10, 11 and 13 reported that they were unduly pressured. MK 10 even stated that the issue was not of particular seriousness. The review was carried out by MK 13 and was approved without further communication.

(6) The following question arises – under what authority did defendant 1 forward the request by fax and for what purpose the telephone communication?

The response of the Prosecution is that he did so in consultation with defendant 2 and apparently accepting, himself and defendant 2, in exchange from NG for exerting influence on MK 10, which was none other than the payment of the sale price.

  • It does not appear from the testimony before us that NG asked for either defendant 1 or defendant 2 to exercise influence in exchange. We have already mentioned that the statements of the Supreme Court and the TC in the e-mail that was found do not constitute testimony against defendant 2 or defendant 1. Any statements of the Supreme Court do not criminally bind NG.
  • As mentioned above, the offence of influence trading involves a quid pro quo. In the present case, there was nothing other than the sale price. The reports of the Police witnesses about the employment of the Board of Directors in the "Giovanni Group" lead nowhere, since from the testimony of MY 4 it seemed that he had a regular agreement with monthly agreed earnings.

(9) Therefore, even if we accept that the forwarding of the letter of exemption again was institutionally reprehensible and outside the role it had under the presidential "authorization", no finding of favour trading within the meaning of the contract can be made."

As a result, Category 3 has not been proven.

The decision states that category 2 is also subject to dismissal, "as it has not been proven that there was an agreement between defendants 1 and 2 and NG to commit an offense or to achieve a legitimate purpose by illegal means. As mentioned above, an agreement to achieve a legitimate end by legal means is not a conspiracy to deceive, no matter how shameful and unscrupulous the purpose or means may be, without of course adopting that this was indeed the case."

It is added that "we do not miss the fact that the lawyer of defendant 2 stated that charges 2 and 3 should be dismissed as the non-interrogation of defendants 1 and 2 (as well as Andreas Pittatzis) for Exhibit 24 and the detected correspondence (Exhibits 24 – 35) affected their right to a fair trial. As mentioned above, they were never questioned about the issues related to the "Reservation Agreement" and the payment of the money. The Defense shouldered the burden of presenting testimony for the e-mails exchanged for the issuance of the certificates. This, in our view, constitutes an essential investigative gap and therefore a gap in the testimony.

The decisions of the first instance to which the counsel referred [see Republic v Achillidis et al., Case No. 32547/14, 7/6/2017 and Republic v Georgoudi et al., Case No. 17540/20, 7/6/2022] find us in agreement with regard to the analysis of the case law on the matter. In Nikolaou v Dimokratias (2014) 2A AAD 376, 389, it was stated (with reference to Panovits v Cyprus, Application (No. 4) 268/04, 11/13/2008, Kappelos v Dimokratias (2007) 2 AAD 241, Sofri a.o. v Italy [2004] Crim LR 846 and Monat v DPP [2001] 2 Cr App R 23] that the right to a fair trial extends to the stage of investigations and that in the appropriate case serious omissions of the Investigating Authorities may lead to the acquittal of a accused".

But, they emphasize, "in order for things to develop in such a way, the omissions must put the accused at a disadvantage compared to the Prosecution and the burden of proof that the accused has indeed been placed at a disadvantage is borne by the Defense and rests on the basis of the balance of probabilities. In the present case, the failure to interrogate defendants 1 and 2 as to the economic aspect of the agreement with NG, combined with the fact that the e-mail relating to the issue of the certificates had been received from TC's computer was not accessible in its entirety, placed defendants 1 and 2 at a disadvantage because, They were confronted with these facts during the trial. They were forced to locate the correspondence from another source in order to give the necessary explanations."

"The whole management troubled us," the judges continue. Although there is a question of a fair trial, they took into account, as they state, the above investigative gaps in their reasoning, evaluating the testimony as a whole. "In view of our acquittal outcome, we consider that any further discussion on the issue of a fair trial has become obsolete," they conclude.

Therefore, by decision of Judges N.A.P. Georgiadis, P.E.D. and N. Economou, A.E.D., defendants 1 and 2 are acquitted and acquitted in relation to all the charges they face, i.e. categories 1, 2 and 3.

The reasoning of the minority's decision

At the same time, Judge M. K. Loizou dissociated herself from her position and ruled that she would convict the two in the 3rd charge and acquit them in the 1st and 2nd. She, reading the reasoning of her own decision, made special reference to the evaluation of critical witnesses, noting that "through the lively atmosphere of the trial, she had the opportunity to watch the testimonies and evaluate them "with the whole of the testimony and logic and not just with the individual judgment". As he said, the work of the Court in the search for truth is "complex and delicate".

Regarding the email that was confirmed as authentic - item 24 - he said that it is an auditory testimony and considers that it can only give weight to the extent of the agreement as well as the detention agreement, i.e. the attachments. He disagreed with the majority for the prosecution witness 5, who was not taken into account by the court. "I do not agree with the majority that his testimony is troubling," he said and added that he did not try to hide anything.

As for the witness of category 13, the judge identified contradictions, noting that he had admitted that one of the pathologies of the KEP was the absence of an adequate legislative framework.

As she said, she considers that "despite the fact that the Parliament did not have institutional development in the KEP, nevertheless Mr. Syllouris had the capacity to promote the interests of Cyprus abroad by order of the then President of the Republic. On the one hand, the Parliament did not have an institutional role in the KEP, but I do not accept and reject his general statement that in the context of parliamentary diplomacy he was involved in the promotion of the KEP."

There was disagreement on the part of the judge regarding the testimony of the Minister of the Interior. " His goal was to defend himself and his own actions, so that he would not be accused of reprehensible behavior. This targeting of him was obvious," he said and questioned his severity. On the contrary, the judge said, in retrospect the Minister tried to justify his decisions. "There were different versions." She could not rely on his testimony and rejected it, the judge said.

The judge stated that 56 of the 103 messages were not opened and the prosecution was not able to use them, while she stood by the non-summoning of essential witnesses.

Regarding category 1, he said that Mr. Syllouris mediated for the illegal naturalization, saying that "it is inappropriate for the President of the Parliament, while he does not have institutional competence in the KEP, to be interested only in cases of clients of Christakis Giovannis". For category 2, the judge said, it was not proven that Syllouris is involved and Giovanni cannot be convicted in it either.

However, in relation to category 3, he stressed that all the constituent elements of the offense are met. "Defendant 1 - Syllouris - promoted the interests of defendant 2 - Giovanni - for the KEP," he said.

The judge cited the case of Odysseas Michaelides as an example, saying that "what the Supreme Constitutional Court had stated in the decision to dismiss the Auditor General also applies to MPs. Officials do not only perform the duties of the position but must be role models and form values and serve the common good from their position." He agreed that the Parliament did not have an institutional role in the KEP, however, he noted that the personal authorization by the then President of the Republic to approach foreign investments in Cyprus cannot apply only to the clients of defendant 2". What happened, he said, cannot be innocent."