MONEY-LAUNDERING RISKS

PROGRAMMES run by some EU countries to sell passports and residency permits to wealthy foreign citizens pose risks of money laundering as some of the schemes are not properly managed, campaign groups said yesterday. Government schemes to trade citizenship or residence rights for large investment are currently applied in 13 EU countries: Austria, Cyprus, Luxembourg, Malta, Greece, Latvia, Portugal, Spain, Ireland, Britain, Bulgaria, the Netherlands and France. Hungary has terminated its programme. “If you have a lot of money that you acquired through dubious means, securing a new place to call home far away from the place you stole from isn’t just appealing, it’s sensible,” Naomi Hirst of rights group Global Witness said. She said checks on individuals that bought EU citizenship or residency permits were not satisfactory and exposed countries to corruption and money laundering risks. The joint report by Global Witness and Transparency International urged the EU to set standards for managing the schemes and to extend anti-money laundering rules, applied so far to banks or gaming firms, to all those involved in the visa-for-sale industry. Acquiring these documents costs on average €900 000 (about R15.2 million), but Cyprus’s passport could cost up to €2m, the report said. Cyprus has raised €4.8 billion from its scheme, while Portugal could earn nearly €1bn a year, according to figures cited in the report, “European Getaway – Inside the Murky World of Golden Visas”. EU states generated about €25bn in foreign direct investment in a decade from selling at least 6 000 passports and nearly 100 000 residency permits, the report said, using conservative estimates.

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