The European Commission warned on Wednesday that programmes of some EU states to sell passports and visas to wealthy foreigners could help organised crime groups infiltrate the bloc and raise the risk of money laundering, corruption and tax evasion.
The warning is contained in the first report the EU executive has produced over the multi-billion-dollar industry of so-called “investment migration”, which allows rich individuals to buy citizenship or residence in countries that put them on sale.
Although legal, these schemes are sometimes run in opaque ways and without sufficient checks on those who acquire passports and visas, the Commission said. It also warned of risks for the entire bloc as passports and residence permits issued by one country of the 28-nation union give unhindered access to most other member states.
This causes “possible security risks such as money laundering, terrorist financing, corruption and infiltration of organised crime,” the EU Commission said in the report, confirming a Reuters story earlier this week.
In the EU, Malta, Cyprus and Bulgaria are the only countries who sell “golden passports” in return for investments ranging between around 1 million and 2 million euros ($2.2 million).
Twenty EU states, including those three, sell residence permits, or “golden visas”, to foreigners willing to invest in their new host countries, with a range of between nearly 15,000 euros ($17,000) in Croatia and over 5 million euros in Luxembourg and Slovakia.
The Commission did not provide estimates of the revenues made by EU states who run these schemes.
But a report from campaign groups Global Witness and Transparency International said in October that EU states generated around 25 billion euros in foreign direct investment in a decade from selling at least 6,000 passports and nearly 100,000 residency permits.
The Commission’s report said that both schemes posed risks, and underlined the shortfalls of programmes run in Malta, Cyprus and Bulgaria, which do not sufficiently check the origins of wealth of individuals who purchased their citizenship, and do not allow their easy identification.
They also circumvented EU rules that require “effective” residence in an EU state before granting citizenship, the report said.
“There should be no weak link in the EU, where people could shop around for the most lenient scheme,” the EU justice commissioner Vera Jourova said.
To tackle the risks posed by these programmes, Brussels said it will set up a group of experts that will recommend by the end of the year a common set of security checks for passport-for-sale programmes.