Al Jazeera reveals how Cypriot officials discussed finding ways to provide citizenship to a convicted criminal.
An opposition politician in Cyprus has raised alarm and concern that a “powerful lobby” will likely resist attempts to end the country’s controversial golden passports scheme after Al Jazeera revealed how high-level officials were willing to help criminals access the programme.
In the wake of Al Jazeera’s investigation broadcast on Monday, the government on Tuesday announced that the Cyprus Investment Programme (CIP), through which wealthy foreigners can become citizens by paying $2.5m into development and infrastructure projects, would end on November 1.
But on Wednesday night, amid anti-corruption protests in Nicosia, Eleni Mavrou, a member of Parliament for the opposition AKEL party told Al Jazeera it was likely the scheme would continue under another name.
“The government made changes to the scheme only when the pressure was full-on, they didn’t do it on their own volition,” she said, referring to laws passed in August intended to protect the system from abuse.
“You must understand that a powerful lobby is pushing for this scheme,” she added.
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Undercover reporters from Al Jazeera’s Investigative Unit were told in October 2019 how government officials, including the president himself, were fighting to protect the investment programme from growing criticism.
“It’s under attack by the European Union, it’s under attack by European Commission, it’s under attack by the money laundering authorities it’s under attack by the opposition party in Cyprus. Everyone’s attacking the Cyprus passport programme,” Andreas Pittadjis, a lawyer and registered service provider of the investment scheme, told our undercover reporters.
“But the president said: ‘I’m keeping the programme. I will make it more difficult, but I’m keeping the programme.’”
A law firm, founded by President Nicos Anastasiades, now in the ownership of his daughters, provides golden passport services while his son-in-law sells properties to CIP investors.
Pittadjis was speaking to undercover reporters in character as Angie and Billy, representatives of a fictional Chinese businessman and convicted money launderer, known as “Mr X”. He urged them that their client should apply for a passport before the laws were tightened further.
“Things are getting more difficult by the day … don’t wait.”
There is now concern there will be a rush to fast-track passport approvals in the remaining weeks before the scheme ends on November 1.
On social media, passport agents have posted advertisements for clients to apply before the deadline.
There is also a suspicion that reforms in the scheme are less than genuine and are only suggested following media revelations.
Pittadjis described how an announcement by the government in November 2019 that it was revoking passports provided in breach of the CIP was simply “a measure for the media to back off”.
.@dreynders are you seeing what we’re seeing?
Days after @AJIUnit exposed systemic #corruption in the Cyrpus #GoldenVisa scheme, industry players are brazenly scrambling to fast-track more EU citizenship applications before it is abolished. pic.twitter.com/rmjAFy0CgV
— Transparency Int. EU (@TI_EU) October 15, 2020
The sale of passports is an important incentive for international investment to Cyprus, worth more than $8bn since 2013.
Soon after the halt to the scheme was announced, Cyprus’s chamber of commerce put out a statement on social media, saying they had asked the government to bring forward plans for a new programme to avoid a “paralyses” of foreign investment.
The Cyprus Papers, a cache of leaked government documents published by Al Jazeera’s Investigative Unit in August, shed light on how Cyprus has used the passport scheme to sweeten relations with investors.
In July 2019, a collective application was submitted on behalf of 18 executives of Melco Investment Holdings, a Hong Kong-registered company behind a 550-million-euro ($645m) luxury development destined to be Europe’s largest casino resort.
The documents show that Cyprus agreed to fast track passports for company executives and their families, bypassing a requirement that applicants should hold a residency permit for six months before applying for citizenship.
Al Jazeera understands the application was made on the suggestion of the Cypriot government to strengthen ties with the investment company. Melco said they acted entirely properly in accordance with the CIP.
The option of purchasing multiple passports through a single large investment was also presented as a good deal, to undercover reporters Billy and Angie.
The lawyer, Pittadjis explained that by investing several hundred million euros in a hotel, Mr X could sell off “slices” of that investment to his own clients so they could get passports.
“You can make the investment, get the passport, and sell slices of the investment for further passports. He can make the investment and then divide it to 25 passport clients.”
“We have made similar structures in the past,” he said, “It’s not complicated.”
Pittadjis said he had run such a scheme for the Giovani group, one of the largest property developers in the country, run by politician Christakis Giovani, who resigned from parliament on Tuesday after he was implicated in the documentary.
A salesperson for The Giovani Group explained that the main reason for investors to bankroll Cyprus’s luxury five-star hotels and developments was the prospect of a passport that would grant them access to the EU.
“This is mostly what people want, the passport, of course, because it gives you direct access [to the European Union]. It’s a smart investment,” the salesperson said.
“No passport case is clean.”
How a criminal can get an EU passport via the Cyprus Investment Programme.
Our investigation The #CyprusPapers Undercover is out on YT now: https://t.co/Xgf3XepCZL
Here is a taster👇 pic.twitter.com/6SDYn1BxED
— Al Jazeera Investigations (@AJIunit) October 12, 2020
A race to the bottom
With the present investment programme due to end, investors seeking EU citizenship will need to look to other golden passport schemes in Malta or Bulgaria.
On Wednesday, Angelo Farrugia, speaker of Malta’s House Representatives, was forced to deny having a special relationship with his embattled counterpart in Cyprus, Dimitris Syllouris.
In the Al Jazeera investigation, Syllouris offered to introduce Mr X to contacts in the Maltese parliament should he fail to get an EU passport through Cyprus.
Anti-corruption campaigners and members of the European Parliament have called for coordinated action to end the sale of passports.
Laure Brillaud, a senior adviser on anti-money laundering at Transparency International said doing so was the only way to avoid a “race to the bottom” between member states, who would feel “encouraged to lower requirements to attract applicants”.
On Thursday morning Syllouris finally bowed to public pressure following a second night of protests and resigned from his positions in Parliament.
Syllouris, Giovanni and Pittadjis deny any wrongdoing.