The European Commission has urged Member States to immediately repeal any existing investor citizenship schemes and to ensure strong checks are in place to address the risks posed by investor residence schemes. The Commission has frequently and consistently raised its serious concerns about investor citizenship and residence schemes and the inherent risks they pose. The latest recommendation forms part of the Commission's broader policy to take determined action on these schemes. The current context of the Russian aggression against Ukraine is once again highlighting these risks.
In effect the trade of the socalled golden passports has proliferated with five Caribbean states revealing they sold citizenship to 88,000 individuals from countries including Iran, Russia, Bielorussia and China. The EC report sets out for the first time the true scale of the Caribbean passport trade. A number of countries sell citizenship to foreign nationals, with prices starting at US$ 100,000 (£82,326) a head.
Dominica, an island with a population of just over 70,000, has issued 34,500 passports, the report claims. The number is more than four times the total previously disclosed by Dominica’s government. St Kitts and Nevis, with a population of 48,000, has issued 36,700 passports, twice as many as estimated up to 2018.
Five Caribbean states – Antigua and Barbuda, Grenada, St Kitts and Nevis, St Lucia and Dominica – have issued 88,000 passports between them. The announcement follows publication of Dominica: Passports of the Caribbean, an investigation by international media organisations in partnership with the Organized Crime and Corruption Reporting Project (OCCRP), which examined Dominica’s citizenship by investment scheme in unprecedented detail.
The sale of passports in Dominica surged after 2015 when citizens of a number of Caribbean states were given permission to travel to most EU member states for 90 days a year without a visa. St Kitts reached agreement on visa-free travel with the EU in 2009. Overall, the EU has visa-free travel agreements with 60 countries.
The commission is proposing to overhaul regulations, saying it is concerned golden passports could be enabling the “infiltration of organised crime, money laundering, tax evasion and corruption”. It wants the power to suspend visa exemption for countries that sell citizenship to buyers who do not have a “genuine link” to the country.
Under the terms of Dominica’s scheme, buyers do not need to have a home there or even visit the country.
In a proposal asking the European parliament to enact new legislation, the commission said: “The EU should have the possibility to suspend the visa exemption for a third country that chooses to operate an investor citizenship scheme whereby citizenship is granted without any genuine link to the third country concerned.”
The commission said those who acquired a second citizenship were being allowed to change names and identities. Such practices could impede border controls and the enforcement of sanctions or Interpol arrest warrants.
The EU home affairs commissioner, Ylva Johansson, said: “We have countries within the visa-free regime with the EU that are selling passports/citizenships quite cheaply to people that are security risks or potential security risks to the EU.
“They are sometimes allowed to change their names and identity several times after getting the new citizenship, and of course this is also security risks for the EU that we have to look into.”
A notorious character with an Antigua diplomat passport was Alex Saab Moran, a fugitive Colomiban money launderer for the regime of Venezuelan president Nicolas Maduro, who by chance was arrested in 2020 in the island of Cape Verde en route to Iran, and later extradited to the United States
Likewise some Russian or Belarusian nationals who are subject to sanctions or are significantly supporting the war in Ukraine might have acquired EU citizenship or privileged access to the EU, including to travel freely in the Schengen area, under these schemes. To address these immediate risks, the Commission is also recommending that Member States assess whether citizenship granted under the ‘golden passport' scheme to Russian or Belarusian nationals on an EU sanctions list in connection to the war in Ukraine should be withdrawn.
Residence permits granted under an investor residence scheme to Russian or Belarusian nationals subject to sanctions should be immediately withdrawn, following an individual assessment and in accordance with the principle of proportionality, fundamental rights and Member States' national law. These measures should apply to Russian or Belarusian nationals significantly supporting the war in Ukraine.
Commissioner for Justice and Consumers, Didier Reynders, said: “European values are not for sale. We consider that the sale of citizenship through ‘golden passports' is illegal under EU law and poses serious risks to our security. It opens the door to corruption, money laundering and tax avoidance. All Member States concerned should end their investor citizenship schemes immediately. In addition, they should assess whether they should revoke any ‘golden passports' already granted to sanctioned individuals and others significantly supporting Putin's war.”
Commissioner for Home Affairs, Ylva Johansson, said: “The right to travel freely within the Schengen area is among our greatest assets. We need strong checks to make sure this right is not abused. Golden residence permits issued to Russians and Belarusians under EU sanctions should be revoked. Now more than ever, in the face of war, we must do everything to ensure that Russians and Belarusians under sanctions and those supporting Putin's war of aggression cannot buy their way into the EU.”
Johansson also raised concerns around migration, telling reporters that 150,000 passengers had used the visa-free travel arrangements to get into the EU and then claim asylum. “This is of course not how the visa-free travelling should be used,” Johansson said.
The report said the rejection rate for applications to Dominica and St Kitts and Nevis was “extremely low (between 3% and 6%), which, together with the short processing times (as little as two months in some cases), raises questions as regards the thoroughness of the security screening”.
It also raised concerns around the nationalities of golden passport holders, saying most applicants came from China and Russia, Syria, Iran, Iraq, Yemen, Nigeria and Libya – all countries that have high levels of perceived corruption.
“Visa-free access to the EU should not be used as a commercial commodity to be sold and bought,” the report said.
Visa-free travel to countries such as the EU and US is one of the key benefits advertised by Caribbean citizenship by investment schemes. Any threat to that privilege could directly affect native-born Dominican citizens, as happened in July when the UK withdrew visa-free travel from its former colony, citing “clear and evident abuse of the scheme, including the granting of citizenship to individuals known to pose a risk to the UK”.