The European Parliament Votes to Ban Such Programs, with Immediate Effect as to all Russian Applicants
On March 9, the European Parliament (“Parliament”) voted overwhelmingly to limit citizenship-by-investment (“CBI”) programs in the European Union. The vote, formally adopting a report by Sophie Int’ Veld, a Dutch Member of Parliament (“MEP”), calls on the European Commission (“Commission”) to enact legislation to phase out CBI programs and establish strict regulations governing residence-by-investment (“RBI”) programs.
Consistent with sweeping sanctions levied against Russia and affiliated entities and individuals in the wake of that country’s invasion of Ukraine, the Parliament is additionally calling for an immediate end to the processing of all Russian applicants of CBI/RBI programs. The Parliament is also calling for EU members to “reassess” all approved applications from Russian citizens from the past few years to ensure that “no Russian individual with financial, business or other links to the Putin regime retains his or her citizenship and residency rights.”
As we will discuss, the risks for countries implementing CBI/RBI programs are significant, not least of which is the potential facilitation of corruption and money laundering. As the Parliament noted in its report, these risks often cannot be properly assessed due to a lack of transparency and are not sufficiently managed, resulting in weak vetting and a lack of due diligence.
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