Reports from Al Jazeera and the Organized Crime and Corruption Reporting Project (OCCRP) have revealed further details regarding the island’s disgraced citizenship-by-investment scheme (also known as the Golden Passports). Thanks to this scheme, dubious persons were able to obtain Cypriot passports.
Al Jazeera, in its undercover investigation “People Who Sell Football,” revealed how convicted felons could buy English football clubs. This gave criminals the opportunity to launder ill-gotten gains.
In The People Who Sell Football, middlemen tell undercover reporters how they can hide the criminal’s money and identity behind offshore trusts and provide fraudulent due diligence reports to the English football authorities.
The intermediaries explained how they are helping to get a new passport and name for a client in order to completely deceive the football authorities.
“We have done this many, many times for others, for those who, I assure you, are in a worse position than your boss,” one of the intermediaries said.
Then one of the intermediaries introduced the undercover reporters of “Al Jazeera” to confidants in Cyprus. This prompted Al Jazeera to investigate the situation in Cyprus, leading to an undercover investigation into The Cyprus Papers in October 2020.
The Al Jazeera report led to the resignations of then House President Demetris Syllouris and his close friend, MP Akel Christakis Jovanis, and sparked anti-corruption protests in Nicosia.Their football investigation alleges that an unnamed Cypriot government minister flew to London to personally help a Russian investor with a shady past. This statement was subsequently categorically denied in a press release by the President of the Republic.
A separate OCCRP investigation cites a photograph of a Limassol villa purchased by Saudi businessman Abdulrahman bin Khalid bin Mahfouz. The citizenship he received was called into question by the Auditor General of Cyprus.
“The Auditor General did not accuse anyone of criminal activity, but said that the unclear circumstances of the case require further investigation,” the report says.
Golden passports by the thousands
Cyprus has approved 6,679 golden passports since the start of the program in 2008, through August 2020. This includes approximately 3,100 primary applicants as well as their spouses, children and parents. In total, the country has attracted at least 6.6 billion euros under the program, according to the Ministry of Finance.
In early 2014, Cyprus made changes to its citizenship by investment program to attract more foreign investors. Previously, individuals had to invest 5 million euros. This amount has been reduced to €2.5 million per participant for “collective investment schemes” of at least €12.5 million. Each participant also had to spend at least 500,000 euros to live in Cyprus.
Myron Nikolatos, a former Chief Justice, released a report on the passport scheme in June. They found that in more than 53% of cases the law was violated. Especially when the issuance of golden passports was carried out to secondary applicants.
The European Commission has launched infringement proceedings against Cyprus (and Malta). This move could potentially lead to financial sanctions imposed by the court.