EU and residence permit for investors in Estonia
Brussels intends to tighten security checks for wealthy investors applying for “gold visas” for EU member states. Thus, according to their reports, these schemes promote money laundering, corruption and organized crime.
The European Commission will soon present its first recommendations to countries on how to protect the system of investments for obtaining residence permits in the European Union.
This step is caused by the high-profile money-laundering scandals last year, such as the Danske Bank case. The Estonian branch of Denmark’s largest creditor is suspected in this case. We are talking about laundering 200 billion euros, mostly from former Soviet republics. In general, EU members noted that the lack of transparency in the issuance of passports has opened the way for criminals from countries with high levels of corruption to work in Europe.
According to Brussels, this recommendation, above all, will apply to countries that offer “citizenship for sale” for billions of euros. This list is led by Estonia, Malta, Cyprus and Bulgaria, which were involved in the scandals with “golden visas”.
Schemes allow wealthy people to buy EU passports, which have such advantages as free residence and movement within the union.
Around 20 EU countries, including Portugal and Spain, also offer limited residency rights to wealthy investors in exchange for property investments, government bonds and sometimes directly to the state budget.
Report on obtaining a residence permit in Estonia
The draft version of the report says that the system of such citizenship of investors creates a number of risks for the member countries and the union as a whole. Namely, security risks due to the penetration of criminal groups into Europe, as well as the possibility of money laundering, corruption and tax evasion. However, according to Dmitry Kochenov, chairman of IMC, many of the risks of investment migration noted in the report, such as tax evasion, are not exclusive to investment immigration and apply to other forms of acquired citizenship, such as naturalization.
Brussels stresses that private investment companies that work together with the governments of Cyprus and Malta to implement these schemes do not have any legal rights to carry out security checks under EU regulations.
According to a study by Global Witness and Transparency International, over the past 10 years, 28 EU member states have received about 25 billion euros in foreign direct investment through a system offering the right of residence or full citizenship in return.
Although Brussels does not have direct authority to restrict countries in issuing residence permits, it will urge governments to agree on common security checks for all applicants. In addition, the experts expect the EU capital to seek mandatory lists of applications submitted and rejected each year, as well as their countries of origin.