The so-called golden visas offered by numerous European Union countries opens the door to criminal and corrupt elements by giving residency permits to non-EU citizens who can pony up enough cash.
This warning from international corruption watchdogs Transparency International and Global Witness came in a special report on the practice of 14 EU countries to give visas or even passports to those able to pay. Due diligence on criminal backgrounds is often insufficient, the groups say, and the permits allow recipients to live freely anywhere in the bloc.
“By their very nature, golden visa schemes are an attractive prospect for the criminal and corrupt,” the report said.
Greece is cheap, Austria very expensive
“If you have a lot of money that you acquired through dubious means, securing a new place to call home far away from the place you stole from isn’t just appealing, it’s sensible,” said Naomi Hirst at Global Witness. “Golden visa schemes offer a safe haven from authorities who might be looking to seize your stolen assets, and the freedom to travel without raising suspicion.”
Greece is among the cheapest, selling its golden visas for just €250,000 while Austria is willing to sell a passport for €10 million. Cyprus, Malta and Bulgaria are the three others that sell passports. Germany offers neither visas nor passports for money.
It is a flourishing business. In the past decade, EU countries have sold some 6,000 passports and 100,000 residence permits, getting €25 billion in direct investments in return. Spain, Hungary, Latvia, Portugal and Britain lead the pack with more than 10,000 visas each. Greece, Cyprus and Malta are right behind. (Hungary has since terminated its program.)
Chinese, Russians lead in applications
The impact for a small country is evident in the case of Cyprus. Since 2013, the island republic, well-known for the growing influence of the Russian mafia, has taken in €4.8 billion for selling passports and visas. By way of comparison, tourism last year drew in €2.6 billion.
It has become a business sector all its own, with hundreds of law firms, notaries and consultants helping with the process.
Not all of the countries disclose the nationality of those getting the permits. Of the eight that do, six report the most applicants from China, while Russians lead in the other two. In Greece, Turkish citizens are in third place behind Chinese and Russians. Portugal is something of an anomaly because Brazilians are in second place, behind the Chinese, due to the common language.
The two organizations are particularly critical of Cyprus and Portugal for not taking enough due diligence in background checks. Maltese officials do more research but have too much latitude in what is acceptable, the groups said.
The watchdogs called for the EU to harmonize rules on such practices. Applicants and their source of funds require careful examination. EU member should exchange information about applicants who are turned down. There should be sanctions against member countries that don’t follow these rules, the groups recommended.
Gerd Höhler is the Athens correspondent for Handelsblatt. Darrell Delamaide adapted this story into English for Handelsblatt Global. To contact the author: firstname.lastname@example.org