As demand for residency or citizenship in EU member states grows, the golden visa schemes are under intense scrutiny from regulators for making it too easy for organized crime figures, tax-evaders, and people whose wealth cannot be easily explained to get a EU passport.
The Transparency International and Global Witness report shows that over the past decade the EU has welcomed more than 6,000 new citizens and nearly 100,000 new residents. However, it claims that the process is often poorly managed.
“With huge volumes of money involved, checks for money laundering and corrupt and illegal origins of the investment have to be especially rigorous, but that doesn’t appear to be the case. In fact, as the report highlights, scandals are rarely far from these schemes,” Transparency International said.
“Authorities claim to follow best due diligence practices during the screening of applicants. Our report finds plenty of reasons to question this claim.”
Spain, Hungary, Latvia, Portugal and the UK have granted the highest number of golden visas to investors and their families, ahead of Greece, Cyprus and Malta.
Moldova is the latest country to join, as its government said this week it wants to strengthen its economy by offering foreigners citizenship in exchange for investments. Their goal is to attract €1.3bn euros over the next five years.
The OECD analyzed residency and citizenship programs in 100 countries and identified high-risk schemes based on whether they are offering low personal tax rates on income from foreign assets without the requirement that a program participant spends considerable time in the country, as reported by International Investment.
Investigators in Bulgaria have recently detained more than 20 people, including officials, for suspected involvement in a lucrative scheme that may have allowed thousands of people to fraudulently acquire passports from the EU member.
The investigation focuses on the national agency for Bulgarians living abroad, where some staff are suspected of taking bribes from people from Macedonia, Moldova and Ukraine in return for certificates stating that they have family roots in Bulgaria, which can be used to apply for a EU passport.
The Portuguese authorities are under fire after issuing a golden visa to a Russian national who is wanted by Interpol.
The European Commission has indicated it will complete a study of citizenship schemes before the end of the year. The commission is concerned that the schemes could compromise EU security because EU citizens are free to move in all member states.