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EUROPEAN UNION

‘Shady characters’: Will EU countries now put an end to ‘golden passport’ schemes?

Since Russia's invasion of Ukraine European countries are coming under pressure to end backdoor routes to EU citizenship which are deemed to be unfair and "shady". This week MEPs in the European parliament made their opinions on the scheme clear.

'Shady characters': Will EU countries now put an end to 'golden passport' schemes?
A picture taken on February 14 , 2022 shows national flags of European Union's member countries at the European Parliament in Strasbourg, France. (Photo by FREDERICK FLORIN / AFP)

The European Parliament on Wednesday called for the phasing out of citizenship by investment programmes operated by some EU countries and for EU-wide regulation on so-called ‘golden visas’ offered to wealthy individuals. 

Such schemes pose a threat to European security and democracy as they can be used “as a backdoor” to the EU for “dirty money”, MEPs argued during the debate.

Members of the European Parliament have been calling for the termination of ‘golden passport’ schemes since 2014, but the issue has become more prominent in the context of Russia’s invasion of Ukraine, because of the number of Russian citizens acquiring rights in EU countries through this route in recent years. 

The resolution passed by the parliament with 595 votes to 12 and 74 abstentions says golden passports should be phased out fully. 

The background…

The market of golden passports and visas developed rapidly since the 2008 financial crisis, as countries have sought to incentivise foreign investment

Three EU countries – Bulgaria, Cyprus and Malta – offer citizenship in exchange for a financial investment. Currently, however, Bulgaria is considering a government proposal to end the scheme, Cyprus is only processing applications submitted before November 2020, and Malta has just suspended the processing of applications from Russian citizens.

In addition, 12 EU countries (Cyprus, Estonia, Greece, Spain, Hungary, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands and Portugal) grant residence permits on the basis of investments, the so-called ‘golden visas’. 

Each national scheme has different rules regarding minimum investment requirements, which range between €60,000 in Latvia and €1.25 million in the Netherlands. These can be through property ownership or contributions to public projects. 

A European parliament study estimates that, from 2011 to 2019, the total investment associated to these schemes has been of €21.4 billion. 42,180 citizenship or residence applications have been approved under such programmes and more than 132,000 people have benefited, including family members of applicants. 

Dutch MEP Sophie IN’t Veld, the European parliament rapporteur, said that “when governments are selling passports or visas, what is actually bringing in the cash is… the little blue and yellow logo on them” – in other words, the EU flag.

‘They are designed for shady business, shady money and shady characters’

Getting citizenship of one EU country of course means the freedom to live and work in all 27 member states, so one country’s passport policy affects everyone in the Bloc. 

Benefits include the right to move to other EU countries, exercise economic activities in the single market, vote and stand as candidates in local and European elections, receive consular protection outside the EU and travel visa-free in many other states around the world. 

Residence also ensures economic rights and the possibility to be joined by family members. 

All this bypassing standard citizenship requirements, which typically involve a period of residence and a “genuine connection” to the country, such as family links, or integration conditions, such as speaking the language and knowing the culture. 

“Passports and golden visa schemes are not about attracting any meaningful legitimate investment in the real economy of Europe. They are designed for shady business, shady money and shady characters,” Sophie IN’t Veld said during the debate.

A picture taken on March 8, 2022 shows European Union’s and Ukrainian flags fluttering outside the European Parliament in Strasbourg, eastern France. (Photo by Frederick FLORIN / AFP)

Security risks

In an earlier analysis, the European Commission found that such programmes pose risks regarding security, money laundering, tax evasion and corruption due to weak vetting procedures. 

For instance, EU countries offering citizenship by investment usually request clean criminal records from applicants or their country of origin, which are difficult to verify especially in case of a conflict. But Malta can waive the requirement “where the competent authority considers such a certificate impossible to obtain”. 

Cyprus, which is not part of the border-free Schengen area, is not connected to the Schengen Information System that allows member countries to share security information.

In addition, EU member states consult on applications for short-stay visas issued to citizens from certain third countries, but they do not consult for citizenship by investment programmes and do not inform each other of rejected applications, the Commission noted.

Media investigations also highlighted how the schemes have been linked to corruption and crime. Journalist Daphne Caruana Galizia was murdered in Malta in 2017 following her investigations into corrupt politicians and money laundering through the citizenship by investment programme, MEPs reminded. 

Brexit-backing billionaire Christopher Chandler, born in New Zealand, was reported to have acquired EU citizenship using the Maltese scheme in 2016.

In 2021 Cyprus revoked the citizenship of 39 foreign investors and 6 members of their families, after it emerged that insufficient background checks had been carried out for over half of the 6,779 passports issued under the scheme between 2007 and 2020. 

‘It is not fair to Ukrainians at this point’

The parliament said on Wednesday that these schemes are “discriminatory and lack fairness” as they contrast “dramatically with the obstacles to seeking international protection, legally migrating or seeking naturalisation through conventional channels”. 

MEPs also called on the European Commission to propose, in 2022, EU-wide regulation on residence by investment schemes. These should include stricter background checks on applicants, their family members and the sources of their funds, minimum residence requirements, investments that truly benefit the economy of the country, and proper scrutiny of intermediaries helping people acquiring rights trough these channels.

“It should not be enough to just buy a house or a villa. The investment must be in the real economy and in line with the climate and social objectives of the Union,” said Sophie IN’t Veld. 

It is “very difficult for small countries whose revenue streams depend on this… I understand it is painful but it is not fair to European citizens, and Ukrainians at this point,” the rapporteur said.

Despite the vote in the European parliament EU powers on this issue remain limited because the rules on the acquisition of citizenship are defined at national level rather than in Brussels. 

The European Commission, however, has already launched a legal action at the European Court of Justice against Cyprus and Malta because “the granting of EU citizenship for pre-determined payments or investments without any genuine link with the member states concerned undermines the essence of EU citizenship”.

What about Russian nationals obtaining golden status?

Russian nationals account for 45 percent of those who have acquired citizenship in EU countries using this route, followed by Chinese nationals and people from the Middle East (15 percent for each group). Chinese investors account for over half of residence permits issued in this way.  

In consideration of Russia’s invasion of Ukraine, the European Parliament also appealed EU countries to stop operating citizenship and residency by investment schemes for Russian nationals with immediate effect and to re-assess whether those who benefited in the past have links to the Putin regime. 

In the first round of sanctions against Russia, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States committed to “limit the sale of citizenship… that let wealthy Russians connected to the Russian government become citizens… of our countries and gain access to our financial systems.”

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK. 

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VISAS

‘Be ready to wait’: Your tips for getting a French visa post-Brexit

Now that Britain is out of the EU, just how much harder is the process of moving to France from the UK after Brexit? British readers share their experiences of applying for visas as 'third country nationals’.

'Be ready to wait': Your tips for getting a French visa post-Brexit

Whether you’re moving to France to live, or you’re a second-home owner wanting to spend more than 90 days out of every 180 in France, if you’re British you will now need a visa.

You can find more on how to apply for a visa, and how to understand what type of visa you need, in our visa section HERE.

But how these systems work in practice is not always the same as the theory.

To learn more about the process of getting a visa as a UK national, The Local asked British readers for their experiences of going through the system.

The consensus among respondents was that the whole thing was bureaucratic, though there were notable differences in experiences that ranged from the “easy” to the “complicated” and “time-consuming”, while the advice for future applicants was, routinely, have all your paperwork ready – and be prepared for a lengthy wait at one of the UK’s TLS centres

Appointments

Like most visas, French visas for UK nationals must be applied for before you leave home. You can find a full explanation of the process here, but the basic outline is that you apply for the visa online, and then have an in-person appointment in the UK in order to present your paperwork. 

Sue Clarke told us: “As long as you get all your paperwork together correctly and in the right order, the time it takes to receive your passport back with the visa in it once TLS has sent it off is only a few days.

“TLS – the centre which works on behalf of the French Embassy to collate your application – is so very busy,” she added. “That part of the process took hours even when you have an appointment.”

READ ALSO EXPLAINED: What type of French visa do you need?

“The visa process itself was fairly well run, and a decision for the initial visa was quick,” wrote Ian Sheppard, who successfully applied for a visa in July 2022. 

“Although getting the follow up residence permit was a pain, [and] took longer than expected, and there was little to no communication with severely limited ways to get in touch about the application.”

Sheppard thought that, biometrics apart, the process could have taken place online, and wondered whether the follow-up residence permit application could be more closely linked to the initial visa application, “rather than effectively submitting the same application twice”.

Georgina Ann Jolliffe described the process as “stressful”. 

“A lot of the initial stage was unclear and I needed a lot of reassurance about the visa trumping the Schengen 90 days. (The Local helped on that one),” she wrote. 

“[The] lack of ready communication was very stressful. It could be slicker, however staff at Manchester TLS were excellent.”

Jacqueline Maudslay, meanwhile, described the process as “complicated”, saying: “The waiting times for the appointment with the handling agent (TLS in the UK) are long and difficult to book online. We applied for a long-stay visa and were given a short-stay visa, with no reasoning and no option of talking to anyone.  

“We had met every criteria for the long-stay visa. There needs to be a contact link with the French Consular website directly for discussing visa applications.”

Handling agent TLS’s website – the first port of call for applicants from the UK – was a target for criticism.

“The TLS system is probably the most user unfriendly system I have ever used,” wrote Susan Kirby. “It throws up errors for no legitimate reason and even changes data you have keyed in. Dates are in American format so you have to be very careful and it can be very difficult to edit.”

Bea Addison, who applied for a visa in September 2021 with a view to retiring in France, agreed that it was complicated and believes the French system is chaotic and badly organised compared to other countries. “Even staff in the French Embassy in London were not knowledgeable of the process and documentation,” she wrote.

“The renewal in France was applied for in July 2022 … we have received an attestation that we will be granted renewal visas, which expired in October 2022, but we have not yet received a date to attend the préfecture due to a backlog.

Second-home owners

Many of our survey respondents were not moving to France, but were instead second-home owners who did not want to be constrained by the 90-day rule.

They have the option of remaining residents of the UK and applying for a short-stay French visitor visa – which must be renewed every year.

Second-home owner Peter Green told us: “Our appointment with TLS was delayed by two and a half hours and the whole experience was chaotic.

“We now have to go through exactly the same process again to get a visa for 2023. With second-home owners there should be a fast track that just involves proving financial viability, nothing else has changed. The system needs to be fully computerised.”

Second-home owner Alan Cranston told us his application met with no problems, but came with “unwanted cost and effort”. 

“Our six-month visa was for our first stint at our house in France in the spring, and that then overlapped our second visit in the autumn which was under Schengen. How that is handled seems to be a muddle (we did not leave the country for a day at the end of the six months, as some advise),” he said. 

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