European Commission urges member states to act on ‘Golden Passports’

The European Commission urges member states to act on ‘Golden Passports’ issued to Russians and Belarusians

Here is a European Commission Press release dated Monday, March 28.

In a recommendation issued today, the European Commission is urging Member States to immediately repeal any existing investor citizenship schemes and to ensure strong checks are in place to address the
risks posed by investor residence schemes.

The Commission has frequently and consistently raised its serious concerns about investor citizenship and residence schemes and the inherent risks they pose. Today’s recommendation forms part of the Commission’s broader policy to take determined action on these schemes. The current context of the Russian aggression against Ukraine is once again highlighting these risks.

Some Russian or Belarusian nationals who are subject to sanctions, or are significantly supporting the
war in Ukraine, might have acquired EU citizenship, or privileged access to the EU, including to travel
freely in the Schengen area, under these schemes.

To address these immediate risks, the Commission is also recommending today that Member States assess whether citizenship granted under a ‘golden passport’ scheme to Russian or Belarusian nationals on an EU sanctions list in connection to the war in Ukraine should be withdrawn.

Residence permits granted under an investor residence scheme to Russian or Belarusian nationals subject to sanctions should be immediately withdrawn, following an individual assessment and in accordance with the principle of proportionality, fundamental rights and Member States’ national law. These measures should apply to Russian or Belarusian nationals significantly supporting the war in Ukraine.

Commissioner for Justice and Consumers, Didier Reynders, said: “European values are not for sale. We consider that the sale of citizenship through ‘golden passports’ is illegal under EU law and poses
serious risks to our security. It opens the door to corruption, money laundering and tax avoidance.

All Member States concerned should end their investor citizenship schemes immediately. In addition,
they should assess whether they should revoke any ‘golden passports’ already granted to sanctioned
individuals and others significantly supporting Putin’s war“.

Commissioner for Home Affairs, Ylva Johansson, said: “The right to travel freely within the
Schengen area is among our greatest assets. We need strong checks to make sure this right is not
abused. Golden residence permits issued to Russians and Belarusians under EU sanctions should be
revoked. Now more than ever, in the face of war, we must do everything to ensure that Russians and
Belarusians under sanctions and those supporting Putin’s war of aggression cannot buy their way
into the EU.”

Investor Citizenship Schemes

Every person that holds the nationality of an EU Member State is at the same time an EU citizen. EU
citizenship automatically gives the right to free movement, access to the EU internal market, and the
right to vote and be elected in European and local elections. This affects all Member States, and the
inherent risks of such schemes have once again been highlighted in the context of the Russian
aggression against Ukraine.

Today’s recommendation stresses that:
Any Member State still operating investor citizenship schemes needs to terminate them immediately. Such schemes are not compatible with the principle of sincere cooperation and with the concept of EU citizenship enshrined in the EU treaties.

On 20 October 2020, the Commission opened infringements against two Member States regarding their
investor citizenship scheme. In addition, the Commission has been urging another Member
State to proceed with ending its scheme. Two Member States abolished their schemes in the
meantime or are in the process of doing so.

The Member States concerned should carry out assessments in order to determine whether
citizenship previously granted to Russian or Belarusian nationals subject to sanctions or significantly supporting the war in Ukraine should be withdrawn.

While carrying out the assessments, the Member States concerned are to take into account the principles
established by the Court of Justice of the European Union regarding the loss of EU citizenship.

Investor Residence Schemes

Investor residence schemes raise inherent security, money laundering, tax evasion and corruption
risks for Member States and for the EU as a whole. Russia’s aggression against Ukraine has once
again underlined these risks.

In the recommendation issued today, the Commission asks Member States to:
Establish and conduct strict checks before issuing any residence permit by investment: Member States should take all necessary measures to prevent investor residence schemes from posing security, money laundering, tax evasion and corruption risks.

This includes establishing and carrying out checks related to the conditions of residence and security before issuing such residence permits, and verifying whether residence is continuous.

Immediately withdraw or refuse the renewal of the residence permits granted under an investor residence scheme to Russian or Belarusian nationals who are subject to EU sanctions in connection to the war in Ukraine, following an assessment.

The same measure should also apply to those significantly supporting the war in Ukraine or other related
activities of the Russian government, or Lukashenko regime breaching international law.
Suspend the issuance of residence permits under investor residence schemes to all Russian and Belarusian nationals.

All measures need to be applied in compliance with the principle of proportionality, with fundamental
rights and with Member States’ national law.

Next Steps

Today’s recommendation is only one element of the Commission’s overall policy to take determined
action on both citizenship and residence investor schemes. The Commission may take additional
action in the future as required. It is for Member States to implement today’s recommendation.

The Commission asks the Member States concerned to report on the implementation of the
recommendation put forward today by the end of May, and keep the Commission regularly informed
afterwards.

Background

Investor citizenship schemes allow a person to obtain nationality based on a significant payment
or investment. Investor residence schemes allow non-EU nationals to obtain a residence permit to
live in an EU country in exchange for a payment or an investment.

In 2019, the Commission issued a report on investor citizenship and residence schemes operated by
a number of EU Member States, which mapped the existing practices and identified certain risks
such schemes imply for the EU, in particular, as regards security, money laundering, tax evasion and
corruption.

While the conditions for obtaining and forfeiting national citizenship are regulated by national law in
each Member State, subject to respect for EU law, nationality of a Member State is the only
precondition for EU citizenship and for accessing rights conferred by the Treaties.

The Commission has frequently raised its serious concerns about investor citizenship schemes and the risks inherent in such schemes and has launched infringements against two Member States regarding their investor citizenship scheme.

Investor residence schemes, while different from citizenship schemes in the rights they grant,
pose equally serious security risks to Member States and the EU as a whole. A valid residence permit
gives a non-EU national the right to reside in the Member State in question, but also to travel freely
in the Schengen area.

While EU law regulates the entry conditions for certain categories of non-EU nationals, the granting of investor residence permits is not regulated at EU level and remains a national competence.

The recommendation presented today is without prejudice to the admission and residence of Russian
and Belarusian nationals in the EU on other grounds, such as humanitarian admission or international
protection.

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