Cyprus Suspends Golden Visa Program Due to Corruption Allegations

The nation of Cyprus has abruptly stopped the issuance of Golden Visas after a press report  and video showed alleged corruption in the process, in which foreigners were welcomed to pay for a visa allowing them residence in the country — and therefore, in the European Union.
After years of denying that the system was used by criminals, primarily money launderers. to buy residence, an Al Jazeera report and video showed there were serious issues with the process.
The video led to an emergency meeting of the Cypriot cabinet, during which the generous program was abruptly brought to a halt.
The Golden Visa scheme ran on the principle that applicants would be granted residency after an investment of $2.5 million in real estate in the country. The monies were desperately needed after the country’s economy almost suffered a total collapse in 2013.
The Al Jazeera story, titled “Cyprus Papers Undercover,” stated that there was outright corruption at the highest levels of the Cypriot government, while reporting that Cyprus President Nicos Anastasiades had repeatedly held that the program was appropriate and that other governments had an even worse record in granting citizenship to such individuals.
The report even named officials who they claimed were complicit in the scheme, including the Speaker of the Parliament, Demetris Syllouris, and a member of Parliament, Christakis Giovanis, one of Cyprus’ largest real estate developers.
A trove of more than 1,400 documents leaked to the press led to the writing of the story, with the first installment in August. The papers allegedly showed that Cyprus knowingly violated laws governing citizenship in order to grant Golden Visas to convicted criminals and fugitives from justice.
Government spokesman Kyriacos Koushos announced after the meeting that the decision will effectively stop the issuance of the visas as of November 1, 2020, according to Cypriot press reports.
He then stated that a new passport system would be instituted after the probe into the Golden Visa scheme is completed.
The clear allegations of fraud are an embarrassment to the entire Golden Visa scheme, in which many European countries take part.
In addition to those already mentioned, Cypriot lawyers and other officials were also implicated in the corruption, according to the Al Jazeera story, which alleged that in many cases, there was no investigation whatsoever into the criminal background of applicants.
Acknowledged “lapses”
On its behalf, the Cypriot government acknowledged that there indeed had been “lapses” in the Golden Visa scheme — after years of denying there had been any mismanagement or corruption involved.
Press reports speculate that the visa scheme had allowed the Cyprus government to rake in  approximately 7 billion euros ($8.25 billion) during the years of its implementation.
Al Jazeera stated in its blistering report that it had used an undercover man, dubbed “Billy” who told officials that he represented a Chinese investor who had already been found guilty of money laundering.
After being told that the man had indeed been jailed for the offense, Billy was assured that that would not be a problem by a real estate developer who had ties to Syllouris — although his conviction should have automatically barred him from the program.
Andreas Pittadjis, a representative for the Golden Visa program, told Billy “That’s not the first to face this issue in Cyprus,” according to the report.
“I had a guy who was in custody for two years. He was in prison for two years for corruption and money laundering. We had ways to justify everything and he went through with the approval of his passport application. He now has his visa waiting for him. No problems whatsoever,” Pittadjis reportedly went on to tell the undercover reporter.
“This is Cyprus”
Even more astoundingly, the representative even told Billy that he could change the name on his passport, allowing this supposed convicted criminal to assume a new identity completely. “Of course we can change his name. This is Cyprus,” he said.
In what was perhaps the most damning part of the video, it showed that Parliamentary Speaker Syllouris even stated “You can tell him that he will have, without mentioning my name or anybody else’s, full support from Cyprus. At any level – political, economic, social, everything – ok.”
It has long been bruited about that Russians, Chinese and Ukrainians had used the program to hide and launder their money, and Cyprus had a reputation for being a hands-off money laundering and tax haven.
In the report, wealthy real estate executives like Antonis Antoniou, an associate of the Giovani Group, headed by Christakis Giovanis, told Billy that his employer should consider investing heavily in Cyprus, suggesting the sum of 20 million euros, or $23.57 million, despite already being told that he was a convicted felon.
“Skip the waiting list”
“The more you invest, (the more) you are on more favorable terms. You can ‘skip the waiting list’, as we say,” Antoniou told the undercover applicant.
The Golden Visa program itself may be on shaky ground in the future. Laure Brillaud, the Senior Policy Officer for the anti-corruption organization Transparency International EU, told interviewers that the video clearly showed the program has completely failed.
“What all this shows is that it’s not just a few bad apples. It’s the system that is broken beyond repair,” Brillaud told Al Jazeera while calling on the EU to take action to change programs across the bloc.
Just “fishing for details”
Given an opportunity to respond to the Al Jazeera story, Pittadjis maintained that he had known from the beginning that money laundering was taking place, but that he was merely “fishing for details” as he questioned Billy.
He also told reporter that several days afterward, when he had not received the promised application papers from Billy, he himself contacted Cyprus’ anti-money laundering body.
On their parts, both Giovani and Antonis Antoniou from the Giovani real estate group told interviewers that they indeed were suspicious of the applicant and that they had shared their thoughts with Pittadjis.
Maintaining that all of their dealings were in an effort to uncover yet more information on Billy’s employer’s shady activities, they said they had acted the way that they had in an effort to avoid “tipping them off.”