Golden Visas Causing Money Laundering and Organized Crime - Brussels

Golden Visas Causing Money Laundering and Organized Crime – Brussels

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EU member States will soon be ordered to have stricter screening process for wealthy investors submitting application for golden visa following issues of corruption, money laundering and organized crime associated with the scheme, according to Brussels.

On Wednesday, January 22, European Commission is expected to offer countries suggestions on how to shield investment for status programs from abuse.

This move by the European Commission is a sequel to the discovery of high profile scandals relating to money laundering in the past year. A case at hand is the laundering of €200bn by Danske bank from former Soviet states.

In the report to be published on Wednesday, Brussels address a scheme, operated by Bulgaria, Malta, and Cyprus, called ‘citizenship for sale’ said to be worth billions of euros. Wealthy individuals can move freely within the EU by buying EU passport via this scheme. This kind of scheme with a characteristic lack of transparency has made it possible for criminals from countries with high corruption reputation to operate in EU.

In a similar vein, nothing less than 20 EU states offer limited rights of residency to wealthy non-citizens of EU when they make a substantial investment in the country. Spain, Portugal, and the UK are examples of countries involved in this.

Risk for the EU Member States

These programs expose EU member States, as individuals or as a whole, to many risks including the entrance of organized crime groups,  tax evasion, and money laundering according to a draft of the report.

The report highlights the problems caused by the disparities in standards involving security, background, and source of wealth checks by different governments in the Union.

A report by Global Witness and Transparency International revealed that EU states had won approximately €25bn in FDI (foreign direct investment) over the last ten years through these schemes.

Although Brussels does not have the power to set rules in this case, it is advising the government to set common standards pertaining to the rules that run these schemes.

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