European Economic and Social Committee Wants to End Investor Residency Programs in the EU

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One of the more controversial issues in international politics centers on the ability of some well-heeled investors to essentially buy residency or nationality in a foreign country with a set investment in the local economy or some other such arrangement.

So-called golden passports or “investor residency programs” have helped attract capital to various places around the world, from Singapore to Cyprus, that has injected much needed funds that, at least in the case of Singapore, are used to build the larger economy. But that’s a best case scenario and it is a rare one at that.

What often happens, opponents argue, is that these passports for sale often end up hiding criminal activity such as money laundering and theft of state assets.

The murky waters surrounding the program are so opaque, in fact, that the European Economic and Social Committee (EESC) wants to get rid of them entirely throughout the European Union in what would be one of the largest changes to come to that organization in decades.

A consultative body that works in tandem with the European Commission and the European Parliament, the EESC brings the concerns of various industries and groups throughout the union to the attention of EU government officials and others through the regular issuing of reports on various topics.

The EESC releases some 160 or more reports per year and their recent report on investor schemes has more than just EU officials talking.

The EESC released an opinion paper, “Investor Citizenship and Residence Schemes in the European Union,” which outlined the need for EU member states to both eliminate these programs as well as why they should do so immediately.

Arguing that these schemes pose threats to EU security, the EESC argued that these agreements often do not align with the fundamental principles which form the basis for the union partnership.

Rapporteur for the EESC, Jean-Marc Roirant, said of the opinion, “The EESC is very worried about the promotion of EU rights and EU citizenship as a product for sale.”

In the meantime, the EESC is advocating for the creation of a joint agency that coordinates and shares information between members states about applicants, current investor passport holders, and rejected applicants.

Not only would this bolster transparency but also would strengthen member state security so that they could identify risky applicants who were denied and are applying or attempting to do so somewhere else.

Other suggestions include oversight of the private industry components that are part of the process, the creation of a code of conduct for authorities handling these applications, and the application of anti-money laundering laws and regulations to all agents handling such transactions. In a press release on the opinion, the European Economic and Social Committee said, “Lastly, the EESC recommends that, while working towards a phase-out of existing schemes in the EU, accession countries should not be allowed to run their own schemes when they join, so that no new schemes are added to the ones currently in place.”

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