Golden passports’ are objectionable ethically, legally and economically and pose several serious security risks, the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs agreed on Tuesday.

With 61 votes for, three against and five abstentions, the committee approved a draft legislative initiative report that sets out an array of measures to address problems linked to “citizenship and residence by investment schemes”.

MEPs will now debate and vote on the report in the next plenary session, being held between March 7 and 10.

If endorsed by the plenary, the Commission will need to prepare a legislative proposal or justify its decision not to do so.

The draft report calls for “golden visas” to be regulated and levied at EU level and for third-countries with visa-free access to the EU to also end their “golden passports” schemes.

Who offers golden passports?

Malta, Cyprus and Bulgaria offer citizenship-by-investment schemes. Twelve member states have residence-by- investment schemes.

Citizenship by investment schemes, under which third-country nationals can get nationality rights in exchange for an investment, are “objectionable from an ethical, legal and economic point of view, and pose several serious security risks”, the report says.

It adds that so-called “golden passports” undermine the essence of EU citizenship and should be phased out.

The text calls for “a meaningful percentage” to be levied on the investments made, which would continue while the citizenship scheme is phased out, and indefinitely for ”residence by investment” schemes, the so-called “golden visas”.

MEPs deplored “the lack of comprehensive vetting procedures” saying the current system “allows for successive applications in different member states”, relying on checks carried out by non-state actors.

What changes are on the table?

The committee demands:

•    stringent background checks (including on family members and on sources of funds)

•    reporting obligations for member states; and

•    requirements for minimum physical residence (for applicants) and active involvement, quality, added value, and contribution to the economy (for their investments).

They also envision a “notification and consultation” scheme to allow other member states to object to a “golden visa” being granted.

The report stresses that the intermediaries for these schemes are neither transparent nor held accountable, calling for a ban on their involvement in citizen-by-investment schemes and a “strict and binding regulation” for residence-by-investment schemes.

"MEPs want to put a stop to marketing practices that use EU symbols or point to the benefits of EU citizenship, and ask for a sanctions framework."

Rapporteur Sophia in‘t Veld said “citizenship is a right, not a commodity to be bought and sold.

"Member states’ governments sell what is not theirs to sell, exploiting the reputation of the EU for profit. Their cynical business is putting our common security in danger.”

At least 130,000 persons have taken advantage of such schemes in the EU between 2011 and 2019, which have generated over €21.8 billion in revenue for the countries concerned.

In 2020 Malta reformed its passport scheme with stronger residency requirements but Brussels remained unconvinced about the changes, describing it as the "same process".

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