Brussels is closely following the Cypriot government's next steps in relation to the Investment Program, following the recent revelations by the Al Jazeera media network. The issue was certainly not at the top of the Commission's agenda this week, which gives the government room to tackle the heart of the issue beyond statements and moves currently being made for internal consumption.
According to a Commission representative who spoke to "K", the relevant services in Brussels are examining whether they are able to limit abuse of ‘golden passport’ programs through legislation, or whether they will start an infringement procedure if it is found that Cyprus failed to apply Union law.
International organizations such as Transparency International, however, insist on the substance of the matter. The organization's Research and Policy Expert on Corrupt Money Flows, Maíra Martini - based in Berlin - told "K" that the EU should pressure Cyprus to consider whether there is a need to revoke previously granted nationalities or whether some of the applicants took advantage of the Cyprus program to launder illegal proceeds.
So far, according to information from Nicosia, following the Al Jazeera revelations and the statements of Justice Commissioner Didier Reynders, the Commission has not formally contacted the government, nor has there been a discussion on any immediate initiation of an infringement procedure.
As "K" is informed, the College of Commissioners did not touch upon the issue last Wednesday in the first, all-day and informal, meeting after the holidays. The meeting took the form of a seminar and focused on the big picture and the preparation of the speech of President Ursula von der Leyen to be delivered before the European Parliament on September 16.
While the Cyprus government is focusing on the search for the person(s) behind the leak to Al Jazeera, a Commission directive requires that whistleblowers are protected
At the same time, there is concern at the governmental level that the European Union could send a message through its emergency funding to deal with the pandemic. Sources in Brussels who are well aware of the funding mechanisms, however, point out that there is no direct link between the two.
The position often repeated by the Commission, which was repeated to "K", is that although the sole responsibility for the granting of citizenship lies with Member States, the common good of European citizenship "should not be exploited by Member States with risky investor programs."
In this context, the Commission "will assess whether any legislative measures are needed to combat the misuse of golden passports, and whether an infringement procedure will be initiated, if deemed necessary".
Naturalizations are a national responsibility but affect all Member States, said Martini on behalf of Transparency International. The EU should consider whether Cyprus has violated the principle of "sincere cooperation", according to which Member States must take care not to endanger their partners.
Over time, as can be seen through occasional statements and information as well as the controversial report of January 2019, the Commission has sent the message that it is not opposed to the very existence of these programs but to their abuse.
That is why the government is investing in the changes it has made in the investment program (in parallel with the continuation of the work of the team of experts of the Member States for the development of common security criteria). Interior Minister Nicos Nouris stated in February, after meeting with Mr. Reynders, that "any doubts about the issue of reliability and solvency of the Cypriot investment program should have disappeared."
Common security measures
Asked what legislative measures the EU could take, Martini said a list of minimum security measures could be put in place to prevent such schemes being abused by criminals.
The basis for the common regulations can be laid by the team of Member States' experts on citizenship and visa programs for investors, staffed by the relevant ministries in the European capitals of the Member States.
The purpose of the committee is to agree on a common line on transparency, good governance and security of investment programs. Work began in Brussels in April 2019, and continued in July, October and December, according to the minutes published so far.
Asked to state where the debate is at, a source close to the Commission said there were no new developments and that experts were working to create a common security framework for examining applications for naturalization or residence permits.
According to the published minutes, these are measures similar to those promoted by the government since the breaking of the scandal revolving around the Cyprus investment scheme after the Commission's report in January 2019 and a series of articles in the Cypriot media.
However, as Ms. Martini pointed out, what Al Jazeera's latest reports have shown is that regulations are not enough if the authorities' own behavior is risky. As she said, some of the most shocking new examples were made by "bypassing the existing regulations".
According to Martini, what is needed is an "increase in transparency and accountability." At the same time, she stressed, the Cypriot government should focus its investigation on revoking citizenship from people confirmed to have been in violation of old and new regulations, but also on whether people with insufficient legal income may have used the program for money laundering.
Whistle blowers are key to democracy
While in Cyprus the government is focusing on the search for the person or persons who leaked the names of investors to Al Jazeera, the message coming from Brussels is that Member States must protect individuals who contribute to the detection of corruption (whistle blowers).
As a Commission spokesman told “K”, whistle blowers "are key sources for investigative journalism and play an important role in our democracies." In December 2019, a directive of the Commission for strengthening EU law in the Member States entered into force, through which an effort is made to strengthen the protection of whistle blowers.
On behalf of Transparency International, Ms. Martini commented that if the Cypriot government really focuses on how the leak took place, then it will have violated EU law again.
"Who got citizenship through the program, especially if they are people with suspicious activities and connections, is a matter of public interest," Martini said. Therefore, the state "should investigate who violated the law and not who leaked information" concerning public interest.
[Reporting by Kathimerini Cyprus’ Brussels correspondent, Giorgos Kakouris]