There is much debate in the Investment Migration industry as to whether these ‘golden visa’ programs are ethical or not.
On August 13th 2018 the Financial Times issued a damning article on how “Brussels targets Dirty Russian Money in a Crack Down on ‘golden visas’ in EU” referring to citizenship programs in Malta, Cyprus, Greece, Hungary and Austria among others. Yet in response, the Maltese Minister of Finance reverted with a letter to the FT highlighting the processes, vetting procedure and transparency of the Maltese Citizenship by Investment program which they operate.
The EU has now informed that they will be issuing their report on EU Citizenship by Investment programs earlier than initially planned, by autumn of this year.
Further regulation and supervision is a positive step in the right direction.
We, along with other players in the industry, certainly welcome news of the upcoming report by the EU on the matter as we are staunch supporters of a globalized world and agree that further regulation will enable registered service providers and governments to weed out the applicants who can’t clearly demonstrate their source of funds.
Steps to Mitigate Risks
In Cyprus, there have been various government initiatives enacted to strengthen the regulation of the Cypriot Investment Program. In June a Committee of Supervision of the Cyprus Investment Programme was established to work with the 250+ registered and authorized service providers to ensure they implement thorough due diligence on their clients during the ‘on-boarding’ stage.
Selecting a service provider is a key component for any applicant for citizenship or residency as they need to ascertain they are appropriately registered, experienced and can deliver a high caliber of expertise and service throughout the process.
We work with S&A, one of the leading firms in the Cypriot industry, who have been pioneering the Cypriot citizenship and residency market over recent years and who are equally committed to delivering professional services with integrity.
Raising the Bar on Anti-Money Laundering Standards
One of the leading organizations that seeks to raise the benchmark in the investment migration industry is the Investment Migration Council.
The Investment Migration Council (IMC) is the worldwide association for investor immigration and citizenship-by-investment, bringing together the leading stakeholders in the field and giving the industry a voice. The IMC sets the standards on a global level and interacts with other professional associations, governments and international organisations in relation to investment migration. The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members. www.investmentmigration.org
The IMC’s Code of Ethics advocates ethical practice, ensuring that members of the IMC act with integrity, honesty, charge fair and transparent fees, ensure they have the adequate level of competency and that of third parties they work with and importantly also respect the legislation (national and international) that they are bound by. The Know your Client guidelines highlight the implications that arise from engaging clients that are not able to pass a thorough screening/due diligence, both for the country in which residence/citizenship is sought and the local agent themselves.
Placing the Debate of a Balanced Scale
In order to have a thorough, educated and balanced understanding of any debate it is also necessary to assess its scope and impact.
As highlighted by Bruno L’ecuyer, Chief Executive of the IMC “Citizenship-by-Investment applicants (therefore) account for about 0.1% of the total of new EU citizenships granted each year.”
The Cypriot government too has implemented a cap on the number of citizenships that can be granted from 2018 onwards, to 700 per annum.
The European Commissioner for Justice, Věra Jourová, announced that the EU will seek to impose more restricting measures of control on citizenship by investment programs to avoid the entry of illicit applicants from third-countries that raise security concerns in the European Union.
The majority of reputable professionals in the Investment Migration support the Commissioner’s mission to investigate and bolster the frameworks within which this service is provided as it will bring to the surface the dubious players who take-on clients without respecting KYC and AML/ATF regulations. They omit to undertake proper reviews of their applicants history and their source of wealth.
Further investigation and regulation on industry practices will bring a more equitable and transparent understanding of the industry and pave a more regulated path for what professionals in the industry seek to achieve – global mobility for our clients.
Bruno L’ecuyer of the IMC commented that “significant time and capital is spent by professional firms and governments to ensure the tightest levels of security and background checks are carried out by European and global security agencies. Likewise, Citizenship-by-Investment applications are also vetted against current EU anti-money-laundering and financing of terrorism legislation, and must adhere to legal and regulatory obligations that individual EU states have adopted in line with EU law.” This is a reassuring response that EU Citizenship by Investment programs are compliant with EU regulations and guidelines.
We welcome a move towards increased transparency and regulation in the industry and feel that this should be a collaborative effort between industry professionals, regulatory bodies and governments to continue raising the benchmark and delivering our investment immigration services with integrity.
Applicants for these EU approved citizenship by investment programs are subject to a proper AML/KYC due diligence process that is duly compliant. The aim of EU investment programs, such as the one offered in Cyprus (read more about the eligibility and criteria here) as well as Malta are to bring in vetted sources of funds for these budding financial centres, to support their respective economies, attract foreign investment and mitigate any need for future bail-outs from international bodies.
For any further queries on the Cypriot Investment Program please get in touch.
What are your thoughts on EU Citizenship by Investment programs? What experience have you had with Investment Migration (Immigration) service providers? Please feel free to comment below or message us directly.
Author: Lorena Jimenez (Director: Business Development @ Axesa Global)
An advocate for international business, global mobility, entrepreneurship and egalitarianism in all realms of business and private life, Lorena is passionate about enabling individuals and corporates to expand their global footprint. She completed her Business degree at a leading Australian University before undertaking a Masters in International Relations in the United Kingdom. Whilst working in the financial services industry she also undertook a Postgraduate Degree in Law (Corporate) from the University of London that complemented her extensive commercial expertise. Lorena has worked throughout Europe in various industries including renewable energy and insurance. She has experience in international business development having on-boarded major international firms, led group expansion initiatives and collaborated with businesses globally.