A prolonged and bitter dispute between the interior minister and auditor general, over probing Cyprus’ golden passports scheme, was renewed this week following a mini report with details on a number of applications through citizenship by investment.
Auditor General Odysseas Michaelides says naturalization of foreign investors in the Republic of Cyprus was changed radically in 2013, while in a recent brief report he raised questions over irregularities in the citizenship by investment programme as well as spotted issues on a spreadsheet that would warrant further investigation.
Michaelides, who managed to obtain complete files in five cases before being denied further access, raised questions but also overall issues based on internal notes in a spreadsheet, including staff notes regarding politically exposed persons whose applications were not outright rejected.
Minister says auditor has no authority
But Cypriot Interior Minister Nikos Nouris says the auditor does not have legal authority to probe the matter, with his office issuing a statement slamming the report.
“This probe is selective and covers only a particularly chosen time period,” the statement said.
Nouris says he will refrain from public discussion on probing passport applications for foreign investors, saying his office ought to wait for the completion of an official probe that is being conducted within a legal timeframe.
A probe currently being carried out by a special investigative committee, which has been formed by Attorney General George Savvides, was based on terms that the President’s Cabinet had authorized Nouris' ministry to itemize.
The probe will sift through all cases of Cypriot citizenship granted through the investment program since its introduction in 2007 and until 17 August 2020, when the latest amended legislative framework covering the program was published.
According to official instructions signed by Savvides, the committee will follow a set of legal guidelines to determine whether all rules and regulations were followed at the time applications were submitted, whether there was compliance with procedures, financial criteria, and naturalization requirements, and whether there were oversights in Cabinet approval decisions.
Auditor general identifies multiple issues
But Michaelides says based on information his office had been provided alone, a number of applications including cases still pending should have been rejected, adding his office could not complete the investigation due to lack of data.
But in one case, the audit office’s mini report showed a foreign investor was naturalized upon the approval of the application while the applicant’s life partner filed for a passport a year later, the same day the couple performed a civil union.
According to Michaelides, the spouse received a passport based on the applicant’s approval a year earlier but without being a family dependent at the time, with the auditor arguing that the state lost revenue from an additional investment of €2.5 million that ought to have qualified the partner in a joint €5 million investment.
The auditor argues the state lost revenue from an investment of €2.5 million from a life partner who became dependent spouse one year later
In other cases, the auditor took issue with student registration letters, pointing out that letters of enrolment showed intent but not actual attendance, while in one case there was no evidence of full-time student status that would have qualified a family dependent under student provisions.
The report made reference to enrolment in part-time evening courses in a third country, saying this did not prove studies were there primary activity for the dependent applicant in the student category.
Michaelides also said he spotted a case where the purchase of a real estate property, which had been used to meet a qualifying criterion in the application, was rescinded two months after the approval, with the auditor arguing that the approved applicant no longer satisfied the criteria due to not owning the property two monthes later.
An official statement from the interior ministry clarified that it would put in motion denaturalization procedures if the ministry determined, based on the special investigative committee’s probe findings, that any applicant oversights at the time of the application would warrant taking away their citizenship.
Earlier this month, Savvides appointed former Supreme Court Chief Justice Myron Nicolatos as head of the special investigative committee, tasking alongside former Supreme Court judge Costas Pampallis, Financial Commissioner Pavlos Ioannou, and Deputy Auditor General Kyriakos Kyriakou.
Media sources said Michaelides was not happy with the attorney general appointing Kyriakou on the committee without prior notice to the auditor general’s office.
The probe ordered by Savvides, a former member of the President’s Cabinet before assuming his new duties, essentially halted Michaelides’ effort to seek more files from the interior ministry, causing more friction between the government and the independent agency.