by Amir Khalil

In October of 2020 news company Al Jazeera leaked a series of sensitive documents and information which served to criticize the government of Cyprus, an event which came to be known as The Cyprus Papers. The controversy revolves around the Citizenship by Investment Program (CIP), allowing non-citizens to obtain a Cypriot passport given that they have invested at least 2.5 million euros into the Cypriot economy. The scheme has seen over 3,300 passports being issued since its introduction in 2013, bringing in over 8 billion euros into the nation’s once failing economy. This has led to rapid modernization across Cyprus, a phenomenon attributed mainly to the revenue the scheme provided as well as wealthy businessmen bringing their operations to the nation to take advantage of Cyprus’ famously low taxation, a hassle-free task thanks to the passports granted by the CIP. Additionally, with 55% of the total revenue entering the nation through investments in Real Estate, there has never been a similar period of growth in the nation’s history when it comes to urbanization.

 

Al Jazeera conducted an undercover investigation into the CIP, involving journalists posing as investors looking to take advantage of the scheme for themselves. What they discovered was that lawyers and top-tier politicians were willing to aid convicted criminals in obtaining Cypriot citizenship, granting them access to the European Union’s internal markets and visa-free travel. A complete disregard for both EU and Cypriot Law was found regularly. Notably, with Andreas Pittadjis, a registered service provider for the CIP, who was recorded as saying “Of course we can change his name. This is Cyprus”[1] in response to a request for a name change to a convicted criminal’s newly acquired Cypriot passport so as to aid in erasing a troubled past. Several legal loopholes were found and taken advantage of in order to make the scheme as streamlined as possible for potential investors, such as the chance for those with too public of a background being able to nominate their family members for the scheme, allowing them to apply as a relative at a later date. There is also an unending amount of bribery present, with reports stating that investors were urged to spend as much money as possible in the interest of ‘cutting the queue’[2]. An incredibly thorough documentary[3] was produced on the matter, exposing countless high-status politicians. Most notable of all was the President of the Cypriot House of Representatives, Demetris Syllouris, who openly endorses a Chinese businessman (a fictional individual whom Al Jazeera used to explore the lengths they could go to in an attempt to display the sheer number of lines that Cypriot officials would cross) whose criminal past was known. Despite stating that the individual had a rich history of money laundering, the undercover journalists were ensured that ‘The more they are able to pay, the easier it would be’[4]. Syllouris was promptly forced to resign from his post, and after mass protests took place across the island, the Cypriot government decided to abolish the CIP from November 2020, with a large number of passports that were issued to criminals being revoked in an attempt to minimize controversy.

 

Despite the unavoidable decision to cancel the scheme indefinitely, high ranking members of the Cypriot government seemed adamant that this was nothing more than a smear campaign from the news organization, stating that all beneficiaries of the CIP ‘met the criteria and were holders of clean criminal records in their countries of origin’[5]. Thus, despite the decision to refuse new applications for the CIP, existing applicants were still afforded the luxury of having their submissions processed. Out of the 1413 post-abolishment applications, just 390 were approved[6], likely suggesting that the government had been under great pressure from the European Commission, who had already taken issue with the scheme and forced Cyprus to ‘demonstrate to the Commission that it has taken measures to comply with its demands’[7].

 

It is still unclear what the termination of the CIP means for the future of the nation, but if the shutting down of dozens of foreign businesses (leading to mass unemployment) is anything to go by, the expeditious modernization that the nation has enjoyed over the last decade seems to have come to an end. With the island’s recent focus having been on rapid, non-stop gentrification, the halting of the scheme has resulted in a standstill when it comes to the nation’s long-term goals, which focused on a Dubai-like transformation to the island that would allow the country’s economy to flourish and prosper. The reintroduction of the programme has significant support from Parliament, however, and the expectation is that it will be reopened following several rounds of improvement as well as a stricter application of the rules and acceptance criteria. Many experts point out that the nation will have no choice but to reintroduce the scheme, as the nation will have no way of keeping its economy afloat otherwise. The consensus is that there is no option (especially with the economic impact of the COVID-19 pandemic) but to ‘draft a comprehensive, transparent, and viable CIP that can be introduced to foreign investors, learning from the mistakes of the past’[8].

 

[1] Al Jazeera Investigative Unit, ‘Cyprus officials implicated in plan to sell passport to criminals’ (Al Jazeera News, 12 October 2020 <aljazeera.com/news/2020/10/12/cypriot-politicians-implicated-in-plan-to-sell-criminals-passport> accessed 2 December 2021

[2] ibid

[3] Al Jazeera Investigations, ‘The Cyprus Papers Undercover’ (Al Jazeera 12 October 2020) <https://www.youtube.com/watch?v=Oj18cya_gvw> accessed 2 December 2021

[4] Citizen Lane, ‘Cyprus Investment Programme CIP Suspended’ (Citizen Lane News 1 October 2020) <https://www.citizen-lane.com/news/2020/10/1/cyprus-investment-programme-cip-suspended> accessed 2 December 2021

[5] Al Jazeera Investigative Unit ‘EU eyes legal action over Cyprus’s ‘golden passport’ (Al Jazeera 27 August 2020) <https://www.aljazeera.com/videos/2020/8/27/exclusive-eu-eyes-legal-action-over-cypruss-golden-passport> accessed 2 December 2021

[6] Christian Nesheim, ‘Cyprus Approves only 27.6% of applications pending since CIP Termination’, (IMDaily, November 10 2020) <https://www.imidaily.com/europe/cyprus-approves-only-27-6-of-applications-pending-since-cip-termination/> accessed 2 December 2021

[7] Christian Nesheim, ‘Cyprus Infringement Procedures’, (IMDaily, June 10 2021) <https://www.imidaily.com/europe/eur-commission-makes-next-legal-move-in-malta-cyprus-infringement-procedures/> accessed 2 December 2021

[8] Charles Savva, ‘Cyprus Investment Programme’, (SavvaCyprus, October 13 2020) <https://www.savvacyprus.com/investor-immigration/cyprus-investment-programme> accessed 2 December 2021