A move by the Cypriot government to make it easier to buy EU citizenship through a special “investment” program came under fire Monday from members of the European Parliament, who said the arrangement undermines the Schengen border-control system.
Nicosia announced Friday it had made changes to its “citizenship-by-investment” program, which gives non-EU nationals the chance to obtain a Cypriot nationality in return for a significant financial investment in Cypriot bonds or residential property.
“I’m really appalled to see that these programs are proliferating. It’s really outrageous,” said Ana Gomes, a Socialist MEP from Portugal who sits on the Parliament’s Civil Liberties, Justice and Home Affairs Committee.
“Selling passports is unacceptable. It’s not always clear if [the applicants] do not have a hidden agenda which may be risky from a security point of view,” said Urmas Paet, an Estonian MEP and former foreign minister, who is currently drafting the Parliament’s position on the EU’s defense union strategy.
Cyprus introduced its program as a “temporary” measure to raise funds after the country was bailed out in 2013. By November last year, the sale of passports had netted the country around €2.5 billion since its introduction, according to Socratis Hasikos, Cyprus’s interior minister, who was speaking to lawmakers in Parliament about the program.
The government has changed its program several times to make it more attractive to potential investors shopping around for a second passport. Malta also has a program that offers citizenship in exchange for investment.
The most recent Cyprus update, adopted by the country’s council of ministers last Tuesday, scraps the requirement for individuals to apply in groups of five. Now an individual investor can obtain a passport in around three months for €2.5 million.
In a statement, Armand Arton, the CEO of Arton Capital, a firm that advised the government on the recent changes, thanked Cypriot authorities “for their prudent work which took into consideration industry requirements and standards … and the need for ease of assessment of the applications.”
The program now also includes a residency requirement that obliges an applicant to own property in the country but not to live in it.
“You have to become a resident first and then get citizenship,”said Akis Kyradjis, a vice president of Arton Capital. “But you don’t have to be in the country.”
The main attraction of the Cypriot program, which costs significantly more than Malta’s, is the speed of the process. “Cyprus demands higher investment,” said Kyradjis. “But the Maltese have been quite slow. It said it would give citizenship in 12 months but it’s usually 18 [months].”
By contrast, Cypriot authorities can issue a residence permit, conduct due diligence checks and grant citizenship “usually within 90 days,” according to Henley Global, another firm involved in the citizenship-through-investment industry. Successful applicants obtain the right to live, work and study in all 28 EU member countries.
A European Commission official confirmed that the Cypriot program continues to be monitored “to ensure that a genuine link between the country and the investors applying for naturalization is established.”