Like many other wealthy foreign investors, Russian and Belarusian citizens bought themselves European nationalities. Some of them are now on the list of sanctions decided after the Russian invasion of Ukraine, and the European Commission would now like to withdraw their “golden passports”, it announced on Monday 28 March.
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Several European countries have a device allowing them to obtain their nationality in exchange for investments, supposed to be used to develop the local economy, or for a fixed sum of money. The purpose of these so-called golden passports is therefore to attract the richest.
1.2 million euros to become a Maltese citizen
The system originated in St. Kitts and Nevis in the Caribbean and quickly spread throughout the region. In Europe, it brought in 4.8 billion euros in Cyprus and 718 million euros in Malta, as law professor Étienne Pataut recalls.
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To become a Maltese citizen, it is now necessary to pay €650,000 to the State, to which are added the purchase of a residence and compulsory investments. In the end, the acquisition of nationality costs 1.2 million euros.
Among those concerned, a Russian and a French
Despite its price, the program has attracted many millionaires. AS Monaco vice-president Vadim Vasilyev is one of them, as is Frenchman Jean-Pierre Millet, former boss of Carlyle, an American asset management company.
The Bulgarian Parliament approved two amendments on March 24 ending this practice, and Cyprus has stopped granting these naturalisations since November 2020. The Maltese government has suspended the granting of golden passports to Russian and Belarusian nationals but has not renounced his device.
Dangerous systems
There may be “good reasons” to the acquisition of a golden passport, concedes the OECD. It can, for example, make it possible to create a business, to give children the benefit of a better education system and to live in a politically stable country.
However, some systems are dangerous and can facilitate dishonest practices. The OECD cites the States whose tax rate on assets is less than 10% and where the buyer is not obliged to spend more than ninety days per year on the territory of his country of adoption.
Tax evasion
For the NGO Transparency International, if the prospect of attracting investors is attractive for States, the system seems to serve “corrupt interests” rather than the common good. Among the recipients of these golden passports, the NGO lists 30 people prosecuted or convicted in their country of origin.
Rather than a passport, it was also possible to buy in some countries a “golden visa”, that is to say a residence permit. A report from the National Assembly highlights the risks of this system: “As an example, a Frenchman has accounts in Switzerland and holds a“ golden visa ”issued by Saint Kitts and Nevis, a well-known tax haven. It is this document that he shows to the Swiss institutions, which thus transmit banking information to the Caribbean islands. » This saves him from paying taxes in France.
Access to the Schengen area put up for auction
In addition, Cyprus and Malta sold passports based on the fact that they gave access to the Schengen area. In doing so, they are selling something that does not “does not belong”, explains Étienne Pataut, which explains the EU’s desire to ban these practices.
For the researcher in private law, the problem is deeper: “Making nationality an object of monetary exchange constitutes a flagrant breach of equality between citizens. » In his eyes, the system of golden passports calls into question the very notion of nationality by shattering the prerequisites imposed on the vast majority of aspiring citizens: the obligation of residence, language skills and integration.