Day: April 29, 2020

Cyprus to Speed Up Golden Passport Applications Amid COVID-19 Pandemic

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Administrative centre in Limassol Cyprus

The Government of Cyprus has decided to expedite the processing of citizenship by investment applications as a direct result of the COVID-19 pandemic. The decision comes among other fiscal measures as an attempt to keep some enterprises afloat and push some liquidity into the market.

The action of expediting citizenship-by-investment, also known as ‘golden visa’ or ‘golden passport’, applications for Schengen Visas has been deemed as necessary to combat the negative financial effects of the pandemic.

Cyprus is not a Schengen Member State however it is an EU Member State, meaning that residents and citizens of the country can travel and do business very easily with other EU and Schengen Member States.

Cyprus’s citizenship by investment scheme, along with all other similar schemes in the EU, have gained harsh criticism since their implementation. This is predominantly due to the risks involved with such a scheme including but certainly not limited to money laundering, tax evasion, organized crime, and corruption.

“Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market. People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States. There should be no weak link in the EU, where people could shop around for the most lenient scheme,” said Commissioner for Justice, Consumers and Gender Equality, Věra Jourová.

According to reports from Global Witness, the ‘golden passport’ schemes that exist in Cyprus and other countries have highlighted a lack of transparency, insufficient due diligence and weak governance, as well as exposing all EU and Schengen Member States to significant amounts of money laundering, tax evasion and corruption, and even security risks.

Similar citizenship by investment schemes exist in Malta and Bulgaria, however, none of these countries require actual physical residence in the respective country to gain permanent residency status and/or citizenship. They only require investments and donations.

For an investor to gain citizenship and a passport in Cyprus, they must: invest €2 million in real estate, make a donation of €75,000 to the Government Research and Development Fund, and an additional donation of €75,000 to the Land Development Organization.

To simply gain a permanent residency permit (in which actual residency is not required) an invest must make a real estate investment of €300,000. The process for either approach usually takes about 6 months after all investments and donations have been made. It is not known exactly how long it will take Cyprus to process their citizenship by investment applications now that the decision has been made to expedite them, or exactly how many they will be expediting.

Global Witness Reports: Golden Visas and Lack of Beneficial Ownership Reporting Aids Crime

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Golden Schengen Investor Visa

Global Witness, an NGO focused on exposing corruption as well as human and environmental rights abuses worldwide, has published two separate reports indicating that ‘golden visa’ programs and the lack of beneficial ownership reporting by EU countries are enabling a host of crimes including money laundering, organized crime, and tax evasion.

Beneficial ownership reporting is government-sanctioned reporting on who-owns-which companies to both expose anonymously owned companies and keep the private sector accountable to the public.

Golden visa programs are government-sanctioned programs by certain Member States that allow for citizenship and passports to be granted to foreign nationals in return for significant investment in the respective Member State. They are interchangeably called ‘golden visa’ and ‘golden passport’ schemes.

The GW report about golden visas highlights that:

  • EU golden passport and visa schemes are still ongoing despite the European Parliaments’ calls for all existing schemes to be phased out.
  • No Member State has ended its investor citizenship scheme, and in fact some have hit new highs in the numbers of applications approved.

Bulgaria, Cyprus, and Malta have ‘golden passport’ schemes that do not require residency; all three have come under harsh criticism for operating such citizenship practices. The EC and EP have both called for the removal of the programs.

“Becoming a citizen of one Member State also means becoming an EU citizen with all its rights, including free movement and access to the internal market. People obtaining an EU nationality must have a genuine connection to the Member State concerned. We want more transparency on how nationality is granted and more cooperation between Member States. There should be no weak link in the EU, where people could shop around for the most lenient scheme,” said Commissioner for Justice, Consumers and Gender Equality, Věra Jourová.

The GW report about beneficial ownership highlights that out of 27 Member States:

  • 17 (63%) do not have a publicly accessible centralized register for the ownership of companies.
  • 5 (18.5%) have a centralized register for the ownership of companies but have significant restrictions that hinder their usefulness in combatting money laundering.
  • 5 (18.5%) have centralized registers that are both free and publicly accessible. The UK is among these countries.

According to the reports, a lack of reporting beneficial ownership of countries stifles the investigations of law enforcement, inhibits public knowledge, and restricts the efforts of investigative journalists.

After the revelation of the Panama Papers in 2016, all Member States agreed that greater scrutiny from investigative journalists and civil society organizations will help prevent further abuse of anonymous companies by the corrupt and criminal. However, the EU still has not implemented EU-wide measures to combat the problem.

EU to Keep Sanctions Against Russia Amid Pandemic

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Moscow Kremlin Russia

The European Union will likely keep sanctions against Russia during the COVID-19 pandemic.

According to Peter Stano, the EU Action Speaker, the sanctions do not inhibit the flow of essential goods and services between the EU and Russia and are the direct result of Russia’s annexation of Ukraine’s Crimean Peninsula on 2014 and the actions following.

“Concretely, and most specifically about Russia, the sanctions targeting Russian companies and individuals linked to the illegal annexation of Crimea and Sevastopol, so these sanctions are in place because of the actions that undermine the sovereignty, territorial integrity, and independence of Ukraine. This means that these sanctions do not prevent Russia from tackling the coronavirus outbreak,” Stano said.

Stano’s statements are in response to a letter from a number of MEPs requesting that the European Commission does not lift the sanctions in the midst of the pandemic.

“Yes, indeed, we have received this letter and the reply will be sent through the usual channels. Just to recall, the High Representative, Josep Borrell, issued a declaration last Friday on behalf of the EU, where it is stressed that sanctions should not impede the delivery of essential equipment and supplies which are necessary to fight the coronavirus and limit its spread worldwide,” Stano said.

In 2014, three sanction packages were imposed over Moscow because of Russia’s actions in Ukraine. The first package blacklisted Russian certain citizens and companies that are now no longer allowed to enter the EU and whose respective EU bank accounts would be frozen. The second introduced sectoral economic sanctions against a limited number of Russian state banks as well as defense and mineral resource enterprises. The third created a total ban on EU businesses operations in Crimea, bans the issuance of Schengen visas to all Russian citizens residing in Crimea, and bans EU maritime or air travel companies from operating in/traveling to Crimea.

The first and second sanctions packages have been renewed every 6 months following their implementation, and the third package has been renewed annually.

Russian President Vladimir Putin has repeatedly denied any involvement in Ukraine since 2014, despite all evidence saying otherwise.

As a response to the EU sanctions, Russia banned the import of a number of food products from the EU, which may have ultimately helped Russia in the midst of the pandemic. This is because it turned Russia from an importer into an exporter of key agricultural products. This would have most likely posed a serious problem with the pandemic because of closed borders and severely disrupted supply chains, had the change not happened. Russia’s response to COVID-19 was quick compared to most western countries, as it has a 2,615-mile long border with China. A special COVID-19 headquarters was created on 27 January, and the border with China was closed on 30 January. Since though, Russia has still confirmed 13,584 cases of COVID-19 as of writing this.

Kosovo Lifts Tariffs on Serbia and Bosnia and Herzegovina, MEPs Praise Decision

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Kosovo Flag

The government of the Republic of Kosovo has recently decided to lift its 100% tariff imposed on Serbia and Bosnia and Herzegovina. The tariff on raw materials was lifted on 15 March, and all other tariffs were lifted on 1 April 2020.

Kosovo Prime Minister Albin Kurti said in a news conference on 31 March that all goods imported to Kosovo from Serbia will only need documentation that “must comply with the constitution of the Republic of Kosovo and the applicable legislation.”

Some Members of the European Parliament seem to be very pleased about the decision and are calling for the lifting of the EU visa regime for Kosovar citizens.

“We count on the EU Member States to fulfill their promise for visa liberalization for Kosovar citizens as soon as possible, despite the current political crisis. This can be an important sign of solidarity, especially for the young people of Kosovo and for the country’s commitment to its European future,” said Romeo Franz, Chair of the Delegation for relations With Bosnia and Herzegovina.

Another MEP Viola Von Cramon-Taubadel, the EP Rapporteur for Kosovo, said that she is hopeful for future positive relations between Serbia and Kosovo as a result of the tariffs.

“We are very happy about the decision of the Kosovo caretaker government to lift the 100% tariffs. This is a very important signal for political cooperation in the region and a crucial step, which we hope, will lead to the resumption of the EU-facilitated dialogue for the normalization of relations between Belgrade and Pristina,” Cramon-Taubadel said.

Kosovo lifting the 100% tariffs will be based on reciprocity from Serbia, but not Bosnia and Herzegovina.

Kosovar Prime Minister Kurti has stated that the lifting of the tariffs could be only temporary and will be reassessed after 15 June, after which the tariffs could be reinstated or completely lifted.

“This decision shall remain in force until June 15, and after that we will make a comprehensive assessment of how well this decision has progressed in terms of implementation,” Kurti said. He added that “periodically, but at least once a month, this decision will be reviewed by collecting data from our customs officials in terms of how reciprocity is functioning.”

However, the Serbian Government Spokesman Marko Djuric is not overly zealous about Kosovo’s decision, calling it “fake news.” He also said that it was a show policy for the international community rather than an act of goodwill towards Serbia.

“This does not de-escalate the situation and does not return to the situation before the introduction of the taxes,” Djuric said. He added that “Pristina continues to play with this issue and… this decision is a play intended for the international community.”

Unemployed Foreigners in Estonia Must Return Home, Agriculture Workers can Stay

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EU Estonia Flag

A statement published by the Estonian Ministry of Interior on 3 April 2020 announced that the government of Estonia amended the Aliens Act and the Obligation to Leave and Prohibition on Entry Act to ensure that third-country nationals who have lost their jobs will return home. The efforts are part of an attempt to reserve employment opportunities for Estonians who have recently become unemployed due to the COVID-19 crisis.

“The draft concerns foreign nationals from third countries holding a visa for employment in Estonia or those working here visa-free. Should their short-term work permit expire or they lose their job for any other reason, they must return to their home country as soon as possible,” said Mart Helme, Estonia’s Minister of Interior.

Helme is also urging recently unemployed foreigners to immediately start looking for a way home instead of waiting for their visas to expire or be annulled.

“I recommend those foreign nationals who lose their job here immediately start looking for opportunities to return home instead of waiting for their visa or visa-free period to expire or be annulled. In case they stay here without an income, they will spend the money that they could use to return to their home country and they might remain illegally in the European Union,” Helme said.

However, in situations in which the third-country national cannot return home due to COVID-19 travel restrictions, the Minister of Interior or the Director General of the Police and Border Control can grant them permission to stay in Estonia until the end of the pandemic crisis.

“We have also considered various options for foreign labor in case of possible long-term crisis situations extending over months that may occur in the future. In case of crisis situations spanning over months, the draft provides that the government can grant foreigners working in Estonia on a short-term basis the right to work here longer than initially permitted,” Helme said.

With a sharp decrease in the global economy within recent months, Estonia has also taken been affected negatively. Estonia has seen a decrease in employment rates since beginning emergency procedures, and the government is making efforts to combat unemployment for Estonians.

Helme added that “they must have the opportunity to take up the vacancies. We have seen that the number of registered unemployed among Estonian residents has jumped in the past month. At the same time, employers have submitted applications for the use of foreign labor in comparable volumes to the rise of unemployment. I suggest that employers look at the numbers and consider using more domestic labor. Our people are definitely worth being offered jobs during the difficult times marked by increasing unemployment.”

The new amendments do not affect foreign agricultural workers, however. In a statement published by the Ministry of Interior on 9 April 2020, it has been announced that migrant workers in the agriculture industry can remain and work in Estonia until 31 July 2020.

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