This statement was made by EU High Commissioner for Justice, Fundamental Rights and Citizenship Vera Yurova . Citizenship “for sale” came under the scrutiny of EU governments and security agencies.
In exchange for donations to a national trust fund or an investment in real estate or government bonds, foreign nationals can become citizens of a country in which they have never lived. Kenley earned tens of millions of dollars from this trade, and his first major client was the government of St. Kitts. Now his industry is on the rise and more and more often it is under scrutiny.
The business of “golden passports” is now a pressing issue for European governments and their special services. Police fear for wanted criminals, as well as sanctions businessmen. For several hundred thousand dollars a client can get the right passport almost without leaving home, with delivery to the local accompanying office or directly to his home.
Henley’s success story began in 2006, when he was hired for a five-year contract to renew his St. Kitts citizenship under an investment scheme. For each successful bid, the company collected $ 20,000. The money was a godsend for the Caribbean, which came immediately after the collapse of sugar exports, the trade that kept the country afloat after independence. Caribbean passports are valuable because they allow visa-free entry to 130 countries, including the UK and many European countries. This sector is a prize for wealthy citizens from Russia, China and the Middle East.
By the way, the business elite of China actively acquired the “golden visas” of the United States through a similar system of investment funds, which was created by Donald Trump’s son-in-law.
The Caribbean can easily turn a blind eye to corruption in some cases. This affected the way passports are distributed, especially diplomatic, which give the bearer the right to all types of special privileges, which is a much more serious security threat. Hurricanes Irma and Maria passed through the Caribbean last fall, destroying dozens of islands, including those that provide citizenship in exchange for investment. Because of this, some countries have made it easier to obtain citizenship for investment .
Border guards in the host country, even without a visa, are almost always admitted by a person with a diplomatic passport. In addition, border forces have no right to search the luggage of diplomats. The sale of diplomatic passports is not part of the citizenship investment program, but it continues, especially in Dominica, which had the most impressive body of quirky diplomats.
Our diplomatic passport was in the hands of Francesco Corallo, who at that time was on the list of Interpol’s most wanted criminals. No one in Dominica had ever heard of Coral, until he was stopped by the Italian authorities. He then said: “You cannot hold me back. I am a diplomat. “They said:” diplomat? Where is the diplomat? ”He said,“ Dominic. ”
What is happening in Europe?
It’s simple: it is connected with corruption and an attempt to launder funds. In July 2018, this business and its roots caused concern of the British deputies. Members of the ad hoc committee on digital technology, culture, media and sports began to consider the issue of “fake news” and corruption in the government of Malta , but they soon found themselves at the center of an unusual situation: studying tactics that can be used to influence elections.
Dark history has been reaching for Kelin since 2009. That year, this country signed an agreement with Europe on the abolition of visas and became attractive for investors. And investment programs for citizenship existed there long before the abolition of visas with Europe. Christian Kelin is suspected of facilitating the purchase of the desired result in the elections of Saint Kitts and Nevin, Grenada, Antigua and Barbuda and some other countries of the Caribbean, as well as in Malta.
The testimony heard by the deputies showed unnatural behavior of Cambridge Analytica and its subsidiary SCL. In a small section of the 89-page interim report, they said that there was an agreement between Alexander Nix (head of Cambridge Analytica) and Christian Kälin. They were told that the pact was created in order to influence the outcome of the elections in those places where Kenley wanted to do business.
Currently there are more than 100 investment migration programs around the world, including in the UK, the USA and throughout the EU. Investment migration stimulates industry, the diversification of foreign direct investment, which creates steady growth for countries and opportunities for their populations. These programs are crucial for small sovereign states with limited industrial and economic potential.
The report, compiled by a special committee of the House of Commons on digital technology, culture, media and sports, states that the deputies have “evidence” indicating that SCL advised the Labor Party of Malta for several years before the 2013 elections. The evidence also allegedly shows that Henley & Partners CEO Christian Kälin was associated with SCL to arrange a meeting with then-opposition leader Joseph Muscat back in June 2011.
The report notes that Caruana Galicia was a tough critic of the scheme of selling citizenship, and the billionaire’s proposal from the conservative party Michael Ashcroft to open branches in Malta to British companies to have a post-Brexit presence in the EU is noted separately.
In July 2018, Kelin won a contract with the Moldovan government, and before that he was appointed to manage the investment program for Grenada. Last year, the company opened an office in Saint Lucia. But he received a super prize in 2014, having signed an agreement with the Government of Malta. The passport of this country is especially valuable because it gives the right to live and work anywhere in Europe.
Founder and co-owner of Yandex Arkady Volozh bought the Maltese citizenship. His name is on the list of those who issued the country’s citizenship during 2016. Together with Volozh, the list contains the full namesakes of his children and parents. Malta has also received the namesake of Alexander Nesis, co-owner of ICT Holding Ltd (42nd place in Russian Forbes), Boris Mintz, owner of O1 Properties (72nd place) and their families, as well as Beluga Group co-owner (largest vodka company) Alexander Mechetin
In 2015, the IMF reported that sales of citizenship brought St. Kitts and Nevis inflows of up to 25% of GDP. The same thing happened in Dominica. In 2015, a tropical storm destroyed 90% of Dominica, funds from the citizenship program helped Dominica recover. In Malta, income from individual investment programs accounted for 40% of 2014 tax revenue.
Europe’s leading economic center has published a blacklist of 21 countries whose so-called “golden passports” threaten international efforts to combat tax evasion. Three European countries – Malta, Luxembourg and Cyprus are among those nations that sell residence permits or citizenship, according to a published report of theOrganization for Economic Cooperation and Development (OECD). This attracts wealthy investors from the CIS countries , who are happy to invest, for example, in the economy of Cyprus.
- Leonid Lebedev, a former member of the Russian parliament and the sole owner of the SYNTHESIS group, is one of the hundreds of Russian citizens who have received Cypriot citizenship. His personal wealth, according to Forbes, is more than $ 1.2 billion.
- Gennady Bogolyubov and his former business partner Igor Kolomoisky were the largest shareholders of Privatbank until it was nationalized by the Ukrainian government in 2016. The Ukrainian Central Bank claimed that both partners illegally withdrew about $ 5 billion from Privatbank. A lawyer representing Bogolyubov, confirmed that in 2010 he was issued a Cyprus passport “as a result of the fact that he made significant investments in the country (through certain companies) and fully complied with the requirements of the law at that time.”
He received the citizenship of Cyprus, in recognition of his substantial investments in this country
One of the most striking cases of the sale of citizenship is the situation with the young Kazakh billionaire Madiyar Ablyazov, who was able to obtain British citizenshipfor multimillion investments, amid accusations of his father of corruption and money laundering
You can show complex presentations about why such schemes are economically useful, but, of course, they are fully exploited by criminal networks, because due diligence, when granting investment citizenship, is almost never taken into account by EU member states. I do not mind if individual Member States grant citizenship or residence to someone who would make a very special contribution to a country, whether in art or science. But this is a provision, not a sale.
I understand that citizenship schemes are favorable for the economy. But this is unfair to people who cannot afford to buy citizenship. And citizenship is something so large and so valuable that citizenship for sale seems to me quite problematic.
We have legitimate concerns, because if in one country a dangerous person obtains citizenship, he obtains citizenship for the whole of Europe. We may all have to revise the whole system and the whole competence of Europe. Because there is a contradiction. If we have any weak spots in the EU, some weak spots that are easy to enter, then the whole of Europe has a problem.
Christian Kälin says that through these programs significant public value is created that can stimulate foreign investment and local GDP. For example, hurricanes Irma and Maria passed through the Caribbean last fall, destroying dozens of islands, including those that provide citizenship in exchange for investment. Because of this, some countries have made it easier to obtain citizenship for investment . Both Kälin and Muscat (the Prime Minister of Malta) consistently advocate the use of such schemes and insist that the applicants are thoroughly checked and rigorously tested for due diligence with regard to the lists of sanctions and records in Interpol and the international criminal court to prevent abuse.
The Home Office is conducting a Tier 1 investor visa test , which was curtailed three years ago amid fears that they were granted to people whose wealth was achieved through corruption. And the right of more than 700 rich Russians to live in the UK is under consideration , since the British government is considering new ways to limit Russia’s influence through oligarchs in Britain, amid poisoning in Salisbury.
We urge the government to review first-tier investment visa recipients to ensure that their entry into the UK does not depend on suspicious wealth. Therefore, we are pleased that the government seems to have committed itself to conducting these checks. During the first seven years of its operation, the Tier 1 investor visa scheme was widely open to abuse by corrupt individuals. During this period, more than 3,000 people received a visa, each investing at least £ 1 million. Our study showed that almost a quarter of them were from Russia. This may mean that more than 700 wealthy Russians received a residence in the UK from 2008 to 2015, without proper verification of the source of their wealth, which allowed them to obtain this visa.