Last year, we had a series of posts on so-called “golden visa” and “golden passport” programs—systems in which countries allow foreign nationals to obtain permanent residence (in the case of golden visa programs) or even citizenship (in the case of golden passport programs) in exchange for a sufficiently large investment in the country, or in some cases for a straight-up cash payment to the government. (See here, here, here, and here.) These programs raise three corruption-related concerns:
- First, in the eyes of some critics, the programs are themselves a form of (legalized) corruption, enabling individuals to use money to purchase something (permanent residence or citizenship) that should not be for sale.
- Second, even if we adopt a narrower understanding of corruption, golden visa and golden passport programs may make it easier for corrupt officials and their cronies (as well as other wealthy criminals) to find safe havens for themselves and their money.
- Third, while several countries have rules designed to deal with the preceding problem, these rules can generate considerable corruption in the programs themselves, as individuals who are ineligible for golden visas or passports can bribe or otherwise corrupt those administering the system to skirt the rules.
Data on the extent of these or other problems, though, is a bit thin, in part because information on the operation of golden passport and golden visa programs—especially with regard to the individuals who take advantage of these programs—is generally not publicly available. But those interested in this topic—and concerned about the corruption risks or other problems associated with these programs—might be interested in a recent report from Al Jazeera, dubbed “The Cyprus Papers,” which analyzed leaked documents on the operation of Cyprus’s “golden passport” program between 2017 and 2019. (Golden passport programs in Cyprus and Malta have attracted particular concern because those two countries are EU members, thus making citizens of these countries EU citizens as well.)
Al Jazeera provides a user-friendly interactive webpage for exploring the results of its analysis of these leaked documents, and I recommend that those interested in this subject check it out. A few highlights:
- Between 2017 and 2019, almost 2,500 people made the 2 million Euro investment to qualify for Cypriot citizenship under the country’s golden passport program.
- In February 2019, Cyprus tightened its rules to render ineligible certain “high risk” individuals, including those who are facing criminal investigation or prosecution, and also “politically exposed persons” (PEPs)—that is, individuals who, within the last five years, served in prominent public positions or had close family members who did so. Of the 2,500 people who obtained Cypriot “golden passports” between 2017 and 2019, at least 60 would have been rejected under these new rules as “high risk,” including 30 PEPs.
- A skeptic regarding the risks associated with golden passport programs might point out that this represents only a small percentage—fewer than 3% of the golden passport recipients between 2017 and 2019 were high risk, and barely more than 1% were PEPs. But those who are concerned about the abuse of these programs might emphasize, first, that the percentages don’t really matter if the harm is large (and the social benefits of golden passport programs are small or non-existent), and, second, that Al Jazeera’s list of high-risk individuals includes only those it could confirm are high-risk, and may be under-inclusive.
- The high-risk individuals who obtained golden passports came from 13 different countries, with by far the largest number (32 out of 60) from Russia.
- As the report points out, just last month (on July 31, 2020), Cyprus amended its laws again to give the government more power to strip citizenship from those who obtained their Cypriot passport by fraud or false representation, who commits a sufficiently serious crime or is listed as wanted by Interpol or Europol within ten years after becoming a Cypriot citizen, who is put on a sanctions list within ten years after becoming a Cypriot citizen, or who otherwise disgraces the Republic of Cyprus or breaks the law. It is obviously too soon to tell how effective these legal changes will be in preventing the abuse of Cyprus’s golden passport scheme.
I’m sure there’s a lot more that researchers will eventually be able to do with the data obtained in this leak. And I’m hopeful that reports like this will get more people paying attention to these programs and perhaps increasing pressure for their reform or abolition.