The Moldova Citizenship-by-Investment (MCBI) program, developed in partnership with its service provider Henley & Partners, has been temporarily suspended due to "questions about the companies that are involved in this program" after a Dubai developer used it to entice investors.
The Kleindienst Group, which is selling properties in the Heart of Europe development, a group of man-made islands 2.5 miles off the coast of Dubai, had promised they would be eligible for Moldovan citizenship.
As part of the offer, those who invest $1.36m into the project are eligible to apply for the MCBI, which is subject to a multi-stage due diligence procedure. Moldova is not an EU member but its citizens enjoy visa-free access to 121 countries, including those within Europe's passport-free Schengen area.
There are questions about the companies that are involved in this program. Until we clear these up, we’re suspending the program"
According to Investment Migration Insider (IMI), President Igor Dodon has expressed his concern on the program following a meeting with Moldova's Supreme Security Council. IMI quotes Dodon as saying: "There are questions about the companies that are involved in this program. Until we clear these up, we're suspending the program".
One of the MCBI's main service providers, global residency and citizenship advisory firm Henley & Partners, in a statement confirmed the suspension.
"The government has informed the MCBI office that it wishes to review the program and the various companies involved as service providers," Henley & Partners said in a statement.
The Henley & Partners statement added that "all applications that have been officially accepted by the programme thus far will be fully processed to completion".
"There will, however, be a temporary cessation of processing new applications so that the government can complete its evaluation and optimization process," the statement added.
Moldova guarantees anonymity to those granted passports under its scheme. The citizenship can be extended to family members for extra fees, and passed down through generations. Applicants are not required to have visited Moldova.
The Kleindienst Group said it had hundreds of inquiries from prospective purchasers, mostly from the Middle East.
CBI schemes have grown over the past decade, with more than a hundred countries now offering them, three in the EU. The industry is unregulated, although the Investment Migration Council, an industry body, sets out a code of conduct for its members.
Although legal, these schemes are sometimes run in opaque ways and without sufficient checks on those who acquire passports and visas, the Commission had said, mostly raising concerns about the programmes in Malta and Cyprus.
In a report released in January, the European Commission also sounded concerns about security, tax evasion and corruption.
Since its introduction last year, the MCBI programme has faced criticism from some who view the programme as a security risk.
"Beyond the obvious ethical concerns, this poses a serious security risk to both Moldova and the entire Schengen area to which it has visa-free access," Naomi Hirst, a researcher at anti-corruption group Global Witness, was quoted as saying in the Daily Mail. "We look forward to an end to the super-rich buying citizenship and access to Europe."