The EU member Cyprus and the Republic of Vanuatu have some things in common that they probably should not have in common. Apart from the fact that both are island states – Cyprus in the Mediterranean Sea and Vanuatu in the South Pacific Ocean – both are willing to sell citizenship and passports, register companies, and sell financial licenses. The Cypriot CySEC and the Vanuatu Financial Services Commission (VFSC) are very friendly financial market regulators and therefore highly sought after. The difference is that Vanuatu discloses its purchasability and Cyprus is silent about it.
The Guardian reported a few days ago about the Citizenships for Sale Program with which Vanuatu is boosting its economy and paying its debts. After the COVID-19-induced collapse of tourism, the sale of passports and the granting of citizenship is the most important source of income. With its Citizenships for Sale Program Vanuatu managed to turn a $33.3m surplus in the first half of 2020 despite the twin crises of COVID-19 lockdowns and April’s category five Cyclone Harold.
Cyprus has a quite similar program in place – the so-called Cyprus Investment Programme (CIP). On 23 August 2020, Al Jazeera revealed its Cyprus Papers, a leak of more than 1,400 passport applications approved by the government of the island nation between 2017 and 2019 which allegedly may raise serious questions about the Cyprus Investment Programme. Purportedly, Cyprus had sold dozens of passports and citizenship to criminals and refugees. They had acquired a so-called “Golden Passport” and thus bought access to Cyprus and the EU.
In the next few days, Al Jazeera wants to disclose the names of the buyers of citizenship. That will be exciting, won’t it?
To apply for a Cypriot passport, applicants must invest at least 2.15m euros in the Cypriot economy, usually by buying real estate, and have a clean criminal record. However, applicants provide their own proof of eligibility, and although Cyprus claimed to check applicants’ backgrounds, the documents obtained by Al Jazeera prove that this did not always happen.Al Jazeera Cyprus Papers (link)
Well, it is not really surprising. Cyprus has been known as an offshore paradise within the EU for years. Especially Israeli entrepreneurs, who are just about an hour’s flight away, use Cyprus to set up their companies there and acquire their licenses for investment companies at CySEC. The amazing thing here is that the EU is watching and doing nothing for so long.