Are Cyprus ‘Golden Passports’ legal?

Nigel Howarth
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Are Cyprus ‘Golden Passports’ legal?

An Al Jazeera investigation has revealed Cyprus has been providing European passports to convicted criminals and high-level political figures.

The large leak of passport data to Al Jazeera’s Investigative Unit exposes serious flaws to the island’s so-called “golden passports” scheme that has generated more than US$8 billion for the Cyprus government.

The European justice commissioner says he will consider legal action against Cyprus. But can it be stopped?

Al Jazeera presenter Hashem Ahelbarra discusses the situation in a 25-minute TV broadcast with guests:

Laure Brillaud – Senior policy officer at Transparency International covering the European Union.

Praxoula Antoniadou – President of the United Democrats political party and former Minister of Commerce, Industry and Tourism of Cyprus.

Jelena Dzankic – Co-director of the Global Citizenship Observatory at the European University Institute.

Possible legal action against Cyprus?

Nigel Howarth
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Possible legal action against Cyprus?

European Commissioner for Justice Didier Reynders first spoke on Al Jazeera about the revelations of the international media network and revealed that he is considering legal action against Cyprus over its citizenship status through investments.

Mr Reynders also called for changes across Europe in citizenship programs through investment and said it would be preferable for him to abolish them altogether.

His comments came after the publication of Al Jazeera’s Research Unit, The Cyprus Papers, a collection of leaked documents showing that Cyprus had sold passports to criminals, fugitives and people believed to be at high risk of corruption.

These documents, which reveal almost 1,500 passport applications with more than 2,400 names, showed that Cyprus failed to carry out the appropriate checks in dozens of cases, thus allowing criminals and persons subject to international sanctions to purchase EU citizenship. .

Reynders also told Al Jazeera that he had asked the legal service of the European Justice Committee “to analyze whether it is possible in the legal framework that we should now start an infringement procedure or submit a legislative proposal”.

Reynders  added that he would like to see some action from the European Union on the new legislation, but most of the responsibility lies with Cyprus.

“After the report you have published and some others in the past, the first element is to make sure that there are some national investigations by the judiciary,” Reynders said.

“It is the duty of the judiciary in Cyprus to investigate the situation, and if possible for the Cypriot authorities to revoke their nationality,” he said. Mr Reynders also focused on the importance of co-operation between EU Member States, calling for more information to be exchanged between supranational authorities.

“We want to have clear information about the different people applying for nationality through a clear exchange of information with Europol and other types of institutions at European level,” he concluded.

MEP Sven Geingold said “The European Commission should put Cyprus before the European Court of Justice. The passport scheme of Cyprus is a risk to security in Europe.

“You should earn your passport and your citizenship by integrating in society. And not because you have a lot of money.”

The Cyprus ‘Citizenship for Investment’ scheme has been controversial, even among Cypriot politicians. Speaking to Deborah Davies of Al Jazeera, AKEL MP Eleni Mavrou said: “The way the scheme was implemented, the last few years, it was obviously a procedure that allowed cases for which the Republic of Cyprus should be ashamed.”

1647 Estia applications, 350 rejected

George Psyllides
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0
1647 Estia applications, 350 rejected

To date, 1,647 borrowers have applied to be included in a state-backed mortgage relief scheme Estia, with 350 already rejected, it emerged on Thursday.

According to the Cyprus News Agency, 301 applications were at the approval stage of being included in the Estia scheme while 350 have been rejected.

Some 200 applicants were deemed unviable and their cases will be handled by the finance ministry. Finance Minister Constantinos Petrides had said in the past that the government would look into other schemes to assist those who could not repay their loans.

The Estia programme was proposed in the wake of the 2013 financial meltdown to help people with non-performing loans (NPLs) retain ownership of their main residence.

The plan would also contribute to deleveraging Cypriot banks.

Banks have until the end of this month to submit applications to the labour ministry.

Unviable applications will be processed after the examination of all other applications.

To be eligible for the scheme, borrowers must meet certain wealth, income, and other criteria.

They must also come to an arrangement with the bank regarding the restructuring of their loans.

Those qualifying for the Estia relief scheme will see their home loan written off by at least 5 per cent, where the value of the mortgaged home is higher than the loan amount; in cases where the home value is lower than the loan amount, the amount written off is the difference between the market value and the loan amount.

From the amount remaining after the loan write-off, the state will pay 33 per cent of the instalments.

Cyprus: How important is a Title Deed?

Elizabeth Michael
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Cyprus: How important is a Title Deed?

The acquisition of a Title Deed is usually simple and straightforward, however, at times it can also involve a very complex and specialised process which understandably is not always very clear to the average person.

Nevertheless, a Title Deed is a very important legal document which is used as evidence to prove ownership of immovable property, such as a home or a plot of land. With regards to immovable property, the Department of Lands and Surveys in the Republic of Cyprus is the only public department in Cyprus that is involved with the rights related to immovable property and a Title Deed needs to be officially registered with this Department.

A Title Deed becomes relevant in the immovable property buying process (whether this involves a home or land), for the transfer of absolute ownership from the seller to the purchaser.

Checking a Title Deed

A lawyer will check the Title Deed to make certain that the seller has the right to sell the property. For example, if a property is owned by a minor (under 18 years of age), a court order has to be obtained to sell the property. The Title Deed also contains important information such as, if any other person has an interest or share in the property, the boundaries of the property, rights of way through the property, including its location, registration number and if there are any restrictions which apply to the Title Deed.

It is important to note that Title Deeds exist for all immovable properties in the Republic of Cyprus. If purchasing an entire property with an existing Title Deed, the title can easily be transferred from the seller into the purchaser’s name, when being represented by a lawyer.

The lawyer will be able to assist in making certain that all of the immovable property taxes, municipality taxes and any income or capital gains taxes have been paid and the relevant Tax Clearance Certificates have been issued. The lawyer will also assist in paying and obtaining all receipts of settlement for all electricity and water bills, including local taxes due to the authorities, as well as the payment of any communal fees up to the date of delivery of the property.

The contracts will then need to be stamped by the Tax Authorities. In addition, so as to follow the correct process the seller needs to declare that there have not been any additions or alterations to the property which affect the issue of the permit. The transfer of the Title Deeds will be undertaken by the Department of Lands and Surveys either by the seller and purchaser in person or their authorised representative that has been granted a Power of Attorney.

Transfer of ownership (at completion)

The transfer of ownership will be made to the purchaser following the complete payment of the purchase price of the property, including payment of the transfer fees and stamp duties which are calculated by the Department of Land and Surveys, according to the value of the property on the date of transfer of the property.

The issue procedures become complicated when, for example, there are any legal obligations, mortgages, encumbrances and/or burdens on the property, including in some cases where there are structural contraventions which do not comply with the relevant permits and licences.

The Title Deed transfer/issuing process depends on each individual case and whether all of the relevant regulations have been adhered to, the relevant permits and licences have been obtained, as well as all the taxes, encumbrances and charges have been paid, including the property transfer fees and stamp duties to the Department of Lands and Surveys.

With the construction of new building project complexes, whether these are apartments or clusters of homes, the first application required is the permit for the division of the land.  The construction of new projects must then be completed in accordance with the planning and building permits.

Building project complexes, however, may also require, for example, inspections on fire safety regulations from the Fire Department as well as the local municipality/authorities for the issue of the relevant licences. If an operational communal pool has been built as part of the complex, a swimming pool licence will be required.

If all goes well and all of the inspections have been successfully completed with the necessary licences obtained and fees paid, a certificate of completion is filed with the Department of Urban Planning and Housing. At the same time, a submission is made for the separation of each individual unit. If approved, an application is made with the Department of Lands and Surveys for the separate issue of the Title Deeds.

The Department of Lands and Surveys will undertake its own investigations and examinations of the building project and it will begin the process for issuing of the separate Title Deeds for each individual property. On completion of the process, the purchaser will need to pay the transfer fees and stamp duties and within a few months of completion, the Title Deeds will be issued thereby securing the ownership of the property to the purchaser.

Trapped buyers

The problem of ‘Trapped Property Buyers‘ arose from purchasers who had complied with their contractual and financial obligations to the seller and had also deposited their contract with the District Land Office by 31/12/2014. If the contract had not been deposited by this date, a Court application would need to be made to obtain an Order for ‘Specific Performance‘, and to deposit the contract.

The Trapped Buyers issue is very intricate and complex since it encompasses the involvement of many parties such as the developers, the buyers themselves, the banks, central government and local government departments. Depending on each individual case and the cause of the source of the delay, these cases need to be assessed and examined separately to either mitigate the risk of delay or perhaps find a remedy to the problem and initiate the procedures necessary to receive the Title Deeds.

It is very important that property owners understand the reason that they are not in possession of their Title Deeds and they should undertake appropriate action to protect their property, by addressing the delays or difficulties with an experienced lawyer, so that a course of appropriate action can be undertaken to help resolve the obstacles hindering the issue of their Title Deeds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

The author


Elizabeth Michael
Michael Kyprianou Advocates & Legal Consultants

No easy way to revoke dodgy golden passports

Editorial
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No easy way to revoke dodgy golden passports

Demetra Kalogirou, head of the task force reviewing high-risk cases of ‘golden passports‘ that were issued to convicted investors, is seeking legal advice to see if their Cypriot citizenship can be revoked.

The task force was set up last year after the government agreed to revoke the citizenship of 26 investors from countries including Russia, Cambodia, Malaysia and Iran following accusations of wrongdoing.

Kalogirou, the chairperson of the Cyprus Securities and Exchange Commission, told the CyBC radio Tuesday that the three-person task force has reviewed the 30 cases it received ever since it was appointed in December 2019.

“There are some cases where the applications included misleading information while in some cases facts were concealed by the applicant (acting on behalf of the beneficiary).

“We have sought a legal opinion to find if stricter and transparent rules (introduced in August 2019) can have retrospective effect,” Kalogirou told CyBC Radio.

Kalogirou said that her task force has been checking against all available databases, locally and internationally, including the police, Interpol, Cyprus’ financial crimes unit Mokas and the Foreign Ministry.

She admitted there were some shortfalls in the legislation for transparency and good conduct reports which were not spotted because of differences in spelling, or because they were not applicable to the anti-money laundering regulations that apply in Cyprus.

Kalogirou’s comments follow an expose published by global media outlet Al Jazeera with incriminating evidence that Cyprus issued passports to investors with a criminal record during the years 2017-2019.

Qatar’s Al Jazeera initial report claimed that 12 dubious investors – including four Russians, two people each from Ukraine, China and Iran, and one from Venezuela and Vietnam – secured Cypriot passports after paying at least €2 million in investments despite being under investigation for corruption and fraud

Al Jazeera is to continue daily reports based on a selection of 1,400 leaked Cyprus government documents on the Cypriot Citizenship for Investment which it claims proves that passports were “sold to dozens of foreigners linked to crime and corruption”.

The outlet will publish more ‘Cyprus Papers‘ during the week.

Plot thickens

Interior Minister Nicos Nouris dismissed the allegations as part of a smear campaign, implying that Turkey was involved in an attempt to discredit Cyprus due to its close ties with the Qatari regime.

“We should ask why an organisation like Al Jazeera, which we all know to which country it belongs and we know where this country stands politically, chooses this moment in time to try to deal a blow to the Cyprus Republic.”

Cyprus investment programme recent amendments

Areti Charidemou and Associates LLC
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1
Cyprus investment programme recent amendments

The Council of Ministers have adopted the amended regulations in regards to the Cyprus Investment Programme (CIP) on the 18th of August 2020.

While the CIP remains the same in principle and structure and while many provisions have remained valid, the recently enacted regulations introduced certain new provisions that provide a more straight forward, legally stable and clarified framework.

In particular, the following provisions have been introduced in addition to and/or in replacement of the previous applicable rules:

  • a “Supervision and Control Committee” has been established with the aim to regulate the services of the CIP registered service providers. Such Committee’s composition shall include the General Director of the Ministry of Interior, the General Director of the Ministry of Finance and the Representative of the Cyprus Investment Promotion Agency or their Representatives provided that they hold managerial positions, as well as duly experienced and trained administrative personnel.
  • a “Naturalizations Control Unit” is established and held responsible for the continuous examination of the citizenship applications, the compliance of all applicants with the applicable regulations and the coordination and/or supervision of the CIP.
  • detailed provisions have been introduced for the guidance and supervision of the registered service providers, in order to ensure compliance with the applicable regulations and the code of conduct. Moreover, the authorities, restrictions and obligations of the registered service providers are expressly defined.
  • increase of the total amount of the required donations to €200,000, out of which €100,000 must be donated to the Cyprus Land Development Corporation and the remaining €100,000 to one of the following:
    • The Research and Innovation Foundation; or
    • The Industry and Technology Service; or
    • The Fund for Renewable Energy Sources and Conservation of Energy; or
    • The National Solidarity Fund.
  • it is emphasized that the investment funds must emanate from the Investor’s personal account or from the Investor’s company/ies based and operating abroad.
  • investment of funds for the incorporation and/or establishment of a land developing company is not a qualifying investment anymore.
  • investments through incorporation or through participation in Cyprus companies and/or corporations and/or businesses based on an investment plan is still a qualifying investment for CIP purposes, provided that such entities have their physical presence and operations in Cyprus. Moreover, substantial activity and significant turnover must be proved, while the number of minimum Cypriot or European employees has been increased to 9.
  • the validity of the applicants’ Criminal Record has been increased from 3 months to 6 months from the date of issuance.
  • the eligibility of the Investors and their family members is subject to certain exceptions clearly defined. Applicants falling in any of the following categories are not eligible to apply for the CIP:
    • politically exposed persons (PEPs), however it only applies to PEPs who hold such a position at the time of the application or within the 12 months prior to the submission of the CIP application;
    • applicants who are subject to criminal investigation either in Cyprus or abroad at the time of the application and/or applicants convicted of serious criminal offences, in both cases applicable only for criminal offences punishable with imprisonment of 5 years or more;
    • applicants that are connected with natural or legal persons who are included in the Restrictive Measures Lists of the European Union and/or applicants that they were connected (at the time of such inclusion in the List) with natural or legal persons who are included in the Restrictive Measures Lists of the European Union;
    • applicants that are connected with natural or legal persons who are included in the Sanctions Lists of the European Union and/or applicants that they were connected (at the time when such sanctions were imposed) with natural or legal persons who are included in the Sanctions Lists of the European Union;
    • applicants that are connected with natural or legal persons who are included in the Restrictive Measures Lists of either the European Union or the United Nations, against whom such Restrictive measures remained valid for a period ended up to 12 months prior to the submission of the CIP application;
    • applicants who are included in the “Wanted List” of either EUROPOL or INTERPOL; and
    • applicants the estate of whom has been seized within the borders of the European Union.
  • the application/s of the Investor’s family members can now be submitted either simultaneously with the Investor’s application or at any time after the submission of the Investor’s application.
  • it is provided that the parents of the Investor or the parents of the Investor’s spouse, as the case may be, could submit the citizenship application provided that they purchase a residential property of minimum €500.000 not including any applicable VAT.
  • it is emphasized that the citizenship may be revoked if any of the economic criteria and/or requirements of the CIP are no longer satisfied.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

The Author

Areti Charidemou
Areti Charidemou & Associates LLC

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