New findings on irregularities with the sale of passports in Cyprus has renewed Europe’s attention on a highly criticised scheme at a time when former Chief of Staff Keith Schembri has been arrested on possible kickbacks from sales of passport in Malta.
An investigation by Al Jazeera revealed how high ranking politicians in Cyprus are involved in the sale of passports to individuals with criminal records.
The revelations are part of what is being dubbed as the ‘Cyprus Papers’, a leak of over 1,400 documents. Like Malta, Cyprus has a programme for obtaining residency permits and citizenship through investment.
It shows that these schemes have attracted criminals and convicted offenders from around the world and also promoted money laundering. This is criticism the European Commission has already made clear two years ago, saying the schemes expose the EU to money laundering, corruption and organised crime.
The findings occur as the court has issued a freezing order against former Schembri and his family as well as top employees and a number of companies associated with him. The freeze came about after the findings of a magisterial inquiry looking into alleged kickbacks received by Schembri through Brian Tonna’s accountancy firm, now defunct, Nexia BT.
As in Malta, the concern focuses on politicians’ involvement in selling the scheme.
It was assassinated journalist Daphne Caruana Galizia who first reported on alleged kickbacks in Malta. The report of the inquiry requested by former Opposition Leader Simon Busuttil in 2017 has not yet been made public, despite high profile arrests following its conclusion.
Greens’ MEP Sven Giegold said the revelations in Cyprus show an unscrupulous mafia-like subculture in an EU member state.
“The sale of EU passports is a blatant violation of EU law. It is shocking how willing Cypriot politicians are to sell EU passports even to criminals. This is not about the misconduct of individuals, but about mafia-like structures that have developed over years.”
“No passport case is clean.”
How a criminal can get an EU passport via the Cyprus Investment Programme.
Our investigation The #CyprusPapers Undercover is out on YT now: https://t.co/Xgf3XepCZL
Here is a taster👇 pic.twitter.com/6SDYn1BxED
— Al Jazeera Investigations (@AJIunit) October 12, 2020
Giegold has called on the EU Commission to initiate infringement proceedings against Cyprus adding that previous announcements of the EU Commission have not yet been put into practice.
“The EU Commission must not wait any longer. Something stinks in Cypriot politics, therefore further measures must be taken. Cyprus should be put on the international list of money laundering states by FATF (Financial Action Task Force). In the area of money laundering and financial crime, Cyprus must be considered a non-cooperative State.”
He then referred to Malta’s scheme to sell passports. “Cyprus is not the only EU country that engages in the sale of passports and visas. Similar structures exist in Malta. In addition to Malta and Cyprus, the EU Commission should also look at the investor programmes of Bulgaria, Portugal and other member states.”
Malta has had its own share of individuals granted a passport only to be arrested in foreign jurisdictions soon after.
He said the sale of passports and visas contradicts the duty of all EU member states to cooperate in a spirit of trust. “In the long term, a ban on the sale of citizens’ rights throughout Europe is needed, as demanded by the European Parliament.”
The Greens in the EU parliament have asked to put the sale of passports on the agenda of next week’s plenary of the European Parliament.
On Tuesday the Cypriot authorities announced that the country’s citizenship scheme will be suspended. The move will come into force next month.