Despite numerous warnings from the European Commission, Cyprus is still considering ‘golden passport’ applications that were pending at the time the disgraced Citizenship-by-Investment (CBI) scheme was ‘irrevocably terminated’ in November 2020.
In October 2020 the European Commission launched infringement procedures against Cyprus and Malta by issuing letters of formal notice regarding their ‘golden passport’ schemes.
The news that Cyprus was continuing to examine ‘golden passport’ applications broke during an interview between Stockwatch and Michalis Zavos, CEO of the Limassol-based D. Zavos Group and member of the Cyprus Land and Building Developers Association (LBDA).
Mr Zavos defended the scheme blaming its collapse on the absence of proper supervision and believes the government will develop a new investment program with stricter terms and conditions.
He went on to say that Cyprus has become a magnet for the rich and spoke of intense interest from wealthy buyers from European countries; in particular, buyers from Sweden, Germany and England, who are looking to buy properties priced at €1 million – € 2 million.
Golden Passport investigations
Former President of the island’s Supreme Court Myron Nicolatos said that, of the 6,779 golden passports issued during the programme’s 13-year run, 53% were issued not to the investors themselves but to family members or top company executives.
The Attorney-General’s Office had warned on separate occasions in 2015 and 2016 that the practice might be unlawful because there was no specific law enabling the government to issue such passports.
Mr Nicolatos said “It’s obvious that the (programme) operated between 2007 and Aug. 17, 2020, with blanks and omissions, without a legal framework and almost without a regulatory framework
“Also absent were those safety valves, the proper legal guidance as well as adequate supervision regarding existing laws and regulations.”
A study by the Cyprus Ministry of Finance estimated that total investment by foreigners amounts to around €9.7 billion.
In addition to the infringement procedures that the European Commission has already launched against Cyprus, the news that Cyprus is continuing to consider ‘golden passport’ applications may lead to further sanctions.