Eroding the Fundamentals of the European Union 

By Oona Tuominen

In August 2020 the Arabic media network Al Jazeera published leaked documents, revealing the alarming truth about the Cypriot programme for non-EU individuals obtaining citizenship by investing in the country. According to the scheme, acquiring a passport requires a minimum investment of around 2 million euros in for instance real estate or government funds. These so-called golden passports equal ordinary ones, providing the holder not only with Cypriot benefits but also with comprehensive advantages of a citizenship of the European Union. 

The Cyprus Papers, as the leaked documents are called, cover information about 2500 such golden passport receivers, of which not everyone is considered to be eligible European citizens. The list includes investigated, wanted and convicted businessmen and politicians from countries such as Russia, Ukraine, China, Vietnam, Afghanistan, Saudi-Arabia and Venezuela. Officially, the Cypriot authorities have required a clean criminal record, yet it seems this policy has been completely neglected in practice by letting the applicants provide the proof by themselves.

Alongside Cyprus, also Malta and Bulgaria have established such citizenship highways for wealthy individuals. The free movement principles of the European Union exacerbate the threats the schemes induce, ultimately making this an issue at EU level. Fundamentally it’s about balancing between two matters: the sovereignty of each member country in determining their own citizenship procedures and strengthening the union’s security.

The EU commission and parliament have expressed concerns about these programmes repeatedly during the last few years without any significant progress. Already in 2014 the parliament urged Malta and the commission to act to abolish the injurious policies. A somewhat stronger message on the issue was delivered by former commissioner Věra Jourová in 2019 when she made official statements arguing that investor citizenship programmes possess unionwide risks related to money- laundering, corruption, tax evasion and security. Jourová accused the responsible governments of lacking transparency and called for an European expertise group to work with local authorities since the commission’s authority doesn’t extend over direct interventions to abolish such schemes. Governments of the liable countries have been declaring that the applicant examination processes have been improved and tightened, mitigating the security risks.

Despite the undertaken actions in the past years, Al Jazeera disclosed yet more investigations in October 2020, substantiating the concerns. By using an undercover agent, pretending to be a convicted Chinese businessman willing to purchase a citizenship, Al Jazeera caught several high-level Cypriot politicians on film gladly ignoring his background and assisting him onward in the process. By bragging about their experience in delivering passports to people actually disqualified by law they exhibit systematic corruption throughout the investor citizenship programme. Al Jazeera’s revelations have been followed by resignitions and criminal investigations, alongside the Cypriot government announcing that the programme will be abolished on the 1st of november.

Despite this implying a turning point, the need for further actions remains since equivalent schemes still exist. Furthermore, Cyprus might substitute the current scheme with a similar new one, undermining the whole development.

From the EU perspective there seems to be real progress underway. Revelations this fall pushed the commission to launch infringement proceedings against Cyprus and Malta, supported by condemning statements in parliament discussion. However, it’s difficult to give the union any yearned-for political credit for the advancement, since the Cypriot turn originated from Al Jazeera’s revelations instead of some political pressure from the EU. This rather encourages critical views on the unions ability to achieve anything essential.

The topic is very unpleasant for the union, concerning the challenges it has faced in the previous years and still struggles with. With Brexit, eurosceptics can more than ever claim leaving to be a viable option when citizens get frustrated with the union’s decision-making. In order to evade an existential crisis the perks of the membership need to be sharpened. Selling EU-passports to criminals erodes the union’s fundamental values and principles from inside and indeed begs the question of its functionality in a time when the opposite message is urgently needed. Transparency and unionwide co-operation in security issues should be at the very core of the EU, definitely not making a soft spot.

The EU has effectively strived for decreasing refugee inflows at its external borders, resulting in short-sighted and inhumane deals with foreign countries and overloaded refugee camps. Meanwhile, wealthy people buy their way into the Schengen area. Besides the criminals being welcomed, which certainly is a major failure, the whole framework per se can be viewed as unethical, exuding injustice as well as lack of principles.

Members of the European Parliament from a wide range of countries and political groups emphasized the immorality of investor citizenship schemes in the parliamentary discussion in the fall of 2020. Yet, the setting in which the majority of member countries are portrayed immaculate as opposed to a handful guilty states is not equitable whatsoever. This is because the Netherlands, Spain, France, Portugal and many other member states, 19 altogether, grant residency for foreign investors. Even though such residency programmes endow investors with less rights compared to the citizenship schemes, they can be considered as citizenship schemes’ little brothers. The essence of both programmes after all, is to pursue economic gains for the country regardless of the questionable moral grounds in a wider perspective. The capital inflows generated through these schemes do play an important role in many economies across the EU, thus biasing many lawmakers to some extent on this issue.

Standardizing the rules when it comes to issuing European Union passports and even Schengen residence permits would remarkably strengthen the union, making the EU live up to its own values. There is some hope that the present awareness of the loopholes and hypocrisy does not lose momentum before disappearing in the jaws of the bureaucratic monster called the EU. A whiff of promising determination has been in the air of late, manifested by the words of President von der Leyen in her first State of the Union speech: ”European values are not for sale”.  

By Oona Tuominen

Illustration: Gabriella Borg Bruchfeld

Related Posts