Home / Regulators / CYSEC / EU Commission takes action against Cyprus and Malta’s malicious Golden Passports Schemes

 

EU passports are highly prized as they give their owners the right to travel, live, and work freely in all 27 members of the union. Unfortunately, some countries such as Cyprus and Malta sell citizenships and thus EU passports as part of investment programs for the sole benefit of these countries. Most recently, Al Jazeera has revealed that Cyprus is also offering its “Golden Passport” scheme to convicted criminals and money launderers. Now the EU Commission takes action to terminate this malicious approach.


Golden Passport Schemes

Brussels has launched legal action against Cyprus and Malta over their “Golden Passport” schemes for wealthy investors, saying they were illegal and undermined EU citizenship. As reported by The Guardian, the European Commission has written to the two countries and demands explanations. Cyprus and Malta are warned that the schemes increased the risks of money laundering, tax evasion, and corruption. The countries have two months to respond to the Commission’s formal notice of action, after which further measures may be taken.

In Cyprus’ “Golden Passport” scheme, investors could acquire a Cypriot passport in exchange for an investment of €2.5m, netting some seven billion euros since 2013. Cyprus has already said it will halt its scheme next month after an investigation by the broadcaster Al Jazeera reported that dozens of those who applied were under criminal investigation, international sanctions or even serving prison sentences (read Al Jazeera’s Cyprus Papers here).

The License Passporting Issue

Cyprus is also notorious for its lax financial market supervisory authority CySEC. Above all entrepreneurs and scammers from Israel, which is only 90 minutes away by plane, use Cyprus to buy licensed investment companies and thus gain access to almost 450 million EU citizens via the EU License Passporting. Over the last 10 years, Cyprus has become the home of numerous forex and crypto-scams as well as a hub for unauthorized and unlicensed PayTechs facilitating scams and cybercrime.

It is about time that the EU Commission also looks at the problem of EU license passporting and asks critical questions. Otherwise the EU financial market is threatened in its very substance.

 

Leave a Reply

Your email address will not be published. Required fields are marked *