Anastasiades tainted by ‘golden passports’ fiasco
Before Cyprus citizenship scandal became an international embarrassment, there was evidence hidden in plain sight the government was involved in selling passports to the highest bidder.
Jho Low was a high-profile fugitive financier from Malaya who purchased the Cyprus citizenship at twice the asking price.
The saga came to surface in November 2019 and quickly gained publicity as it became evident the head of the Church of Cyprus received a EUR 300,000 donation in exchange for assisting Low’s citizenship application.
Both the Archbishop and then Interior Minister Socrates Hasikos admitted they had been in contact to discuss Low’s application.
Apparently, the government turned a blind eye to Low’s criminal activities and agreed to grant him Cyprus citizenship.
For what it’s worth, the Interior Minister disclosed that Bank of Cyprus, handling Low’s account, filed a complaint with the Unit for combating money laundering immediately after Low’s citizenship application was approved.
The government is known to have good relations with the Archbishop in exchange for his political support.
Interestingly, although the programme required foreigners eligible for citizenship to invest a total of ?2.5 mln in assets and housing, Low allegedly spent ?5 mln on a single property.
However, the initial investigation commission headed by the reputable financial watchdog Demetra Kalogerou discovered the real value of his property was only ?800,000headed by the reputable financial watchdog Demetra Kalogerou discovered the real value of his property was only EUR 800,000.
So, the obvious question is who benefited from the difference of more than EUR 4 mln?
Al Jazeera aired a sensational documentary last October capturing on camera a Cypriot lawyer saying the more difficult the application, the higher the required value of the investment.
Economic theory will support such a claim.
Evidently, this was the practice in the case of Jho Low. President Nicos Anastasiades played a major role in promoting the programme, publicly assuring it was free of any pitfalls.
His critics accuse him of having a massive conflict of interest through the law firm that he established and is presently run by his daughters since he left the firm to take office back in 2013.
Anastasiades repeatedly played down these accusations, arguing he is no longer involved in the affairs of his former law firm.
Not a very convincing argument, though.
His son-in-law is involved in real estate development, mostly geared toward investors of the passport scheme.
He became a political liability for the president when he aired a short promotional video showing him driving a luxury vehicle in Limassol, living the life of the rich and famous to attract foreign investors.
The promotional video echoed the spirit of the government website – Cyprus Citizenship by Investment – which promoted the view, “In today’s world of chaos, people are looking for a spot without chaos where they can enjoy life, rebuild a life or start a new life.”
That’s what many people like Jho Low tried to do with illgotten gains in Cyprus and their Cypriot passport.
Vertically integrated
In a way, President Anastasiades, through his family business activities, became vertically integrated.
His son-in-law was selling luxury properties, his daughters prepared the citizenship applications and the cabinet headed by Anastasiades approved these applications.
The current investigation commission is due to publish an interim report by the end of the month.
It remains unclear whether it will contain any details of possible conflicts of interest or wrongdoing of the president, although he has testified.
But any such evidence will not come from questioning, but from examining the applications that were processed through the president’s family’s law firm.
The president remains adamant that no such evidence exists, declaring no wrongdoing on his part or his family.
Others criticised the president for blowing up the UNsponsored chance in 2017 to solve the Cyprus problem in Switzerland.
They argue that Anastasiades backed down from his longdeclared position of a bi-zonal bi-communal federation which he supported in the referendum in 2004 and based his 2013 election campaign on.
Critics maintain that Anastasiades did not wish to upset the lucrative citizenship programme that benefited his family. But his critics have yet to provide hard evidence for such allegations. So far, President Anastasiades denies any wrongdoing.
However, the Al Jazeera report tells a different story. Speaker of the House, Demetris Syllouris, appeared in the broadcast promising an undercover Al Jazeera reporter, that he could summon the Interior Minister to his office to find a solution to any problem presented in the application of his client. Syllouris resigned within days after the report aired.
But the admission he could work with the government to find a solution for an application of a foreigner with a criminal record raises questions about the programme which gained traction after Anastasiades first took office.
And the case of Jho Low points to political malpractice by President Anastasiades.
Following the collapse of the Cyprus Citizenship for Investment Scheme, developers of large projects urge government to make the residency programme “more functional and easily accessible”.
The Association of Large Investment Projects (ALIP) and the Land and Building Developers Association (LBDA) have sent a letter to the foreign and interior ministers with suggestions to make the permanent residency programme (PRP) more attractive to foreign investors.
The move comes after the government scrapped the discredited ‘golden passports’ back in November that was essentially linked to luxury real estate purchases.
In their joint letter, the ALIP and the LBDA argue that scrapping the CIS program combined with the blow the economy has suffered from COVID-19, highlights the need to attract new investments.
Urging for an immediate review of existing programs and measures, the two business groups urged authorities to rethink the PRP.
They argue that Cyprus needs to update its foreign residency framework to be competitive with similar programs running in other EU countries.
Currently the PRP grants permanent residence status to foreign nationals with the purchase of real estate property worth at least EUR 300,000 while applicants must have EUR 30,000 in a Cypriot bank.
Successful applicants will also have to visit the island to provide their biometric data to authorities.
Developers suggest that biometric stations could be set up at Cyprus embassies in third countries such as China, Vietnam, the UAE, Russia, the UK, so as to facilitate possible investors.
Applicants also have to provide proof of a secured annual income of EUR 30,000 while additional income is required in case applicants have family dependents.
Property developers are asking for a spouse’s income to be taken into consideration and the requirement to have money in a Cypriot bank to be abolished.
Developers would also like to see investors given the opportunity to invest jointly in real estate without the need to be related to each other while approved applicants, related to the joint projects, would be allowed to reside and work in Cyprus.
Another suggestion is to give permanent residency card holders the right to travel to EU member states and the UK for a few days without the need for a visa.
Schengen
They also called for Cyprus to expedite procedures for accession to the Schengen area, which would allow successful applicants to travel to countries covered by the agreement.
“The fact that Cyprus is outside Schengen is a substantial and significant disadvantage in relation to competing European countries.”
During a teleconference, the ALIP held with Foreign Affairs Minister Nikos Christodoulides last week, the minister told the association that Cyprus joining the Schengen Area is in the third phase of its evaluation.
Christodoulides argued that accession to the Schengen zone was a priority for the government and expressed optimism the Republic would not face any problems in its evaluation process.
Cyprus finally dropped the “golden passport” scheme in November after Al Jazeera aired a documentary showing reporters posing as fixers for a Chinese businessman seeking a Cypriot passport despite having a criminal record.
Parliament speaker Demetris Syllouris and AKEL MP Christakis Giovanis were secretly filmed allegedly trying to facilitate a passport for the fugitive investor. They later resigned, although insisted their innocence of any wrongdoing.
Al Jazeera reported that dozens of those who applied were under criminal investigation, international sanctions or even serving prison sentences.
The passport scheme generated over EUR 7 bln in issuing thousands of passports to investors mainly through property deals.