EU lays down guidelines for CBI Programmes: A push for higher security, stronger standards

The EU Commission urges strict principles for Citizenship by Investment programmes, enhancing security and standards, with Ylva Johannsen appointed as oversight head.

In a landmark move following a recent meeting in Brussels, the European Union (EU) has urged countries offering citizenship by investment (CBI) programmes to implement stricter rules in a bid to ensure enhanced security and safety of the European region, said a reliable source in EU Commission in Brussels.

“Ms Johansson (European Commissioner for Home Affairs), known for her expertise and dedication in her field, will spearhead an oversight committee to monitor the operations of these third country programmes over a six month period. This signifies a concrete commitment by the EU to enforce the philosophy they have touted for some time now.” The official added on condition of anonymity.

According to information, it was indicated that the following guidelines would be suggested to countries offering CBI Programmes.

  1. Introduce enhanced due diligence on all applicants and to be conducted by reputable international due diligence firms based in the EU, US, and UK. The firms must be a third parties of high repute.
  2. Implementation of mandatory interviews for all CBI applicants. These interviews can be conducted either in person or via trusted online digital platforms.
  3. No official citizenship documents or passports should be sent to new citizens via a postbox after the granting of citizenship.
  4. The investment thresholds should be increased, with a minimum of US $200,000 (per single applicant) for applications under the donation option and a minimum of US $400,000 for real estate investments.
  5. Flow of funds must be properly monitored and verified against strict money laundering processes. This includes the requirement that the investment funds should to be transferred directly to the host country under all circumstances, and must not be diverted into accounts in other countries.
  6. The abolition of all promotional material of passports from these third countries that shows the benefit of visa-free access to the EU.

These principles have been outlined in an effort to ensure that these third countries maintain or implement high standards in their CBI programmes.  The EU Commission has sent a stern message to countries offering these programmes, insisting on strong mechanisms to safeguard the EU and its citizens.

The Commission has stressed that the principles, focusing on enhanced due diligence, stricter investment criteria, and rigorous handling of citizenship documents, among others, are crucial to ensure the integrity of these programmes and their compliance with international laws and standards.

Further the specialized committee led by Ylva Johansson will ensure that the operations of these programmes are in line with the prescribed principles and will work towards the prevention of misuse and abuse.

Principles Explained:

  1. Enhanced Due Diligence on CBI Applicants

The principle of enhanced due diligence refers to a more comprehensive and detailed scrutiny process to be conducted on all applicants of the CBI programmes.

This process is aimed at mitigating risks related to fraud, money laundering, and other illicit activities. It involves the in-depth examination of applicants’ background, financial dealings, and overall credibility.

According to the EU Commission’s guidelines, this thorough examination should be conducted by third-party due diligence firms of high repute, based in the EU, US, or UK. The requirement for these firms to be reputable and third-party ensures an unbiased, professional, and rigorous assessment, thereby enhancing the integrity and security of the CBI programmes.

  1. Mandatory Interviews for CBI Applicants

This principle refers to the mandatory implementation of interview procedures for all CBI applicants. The interview process is essential in order to gain a more in-depth understanding of the applicant’s intentions, assess their credibility, and to provide an additional layer of scrutiny to the overall application process.

These interviews can be conducted either in-person or via digital platforms, making them accessible regardless of geographical constraints. By recording these interviews, authorities can maintain a comprehensive record for future reference or investigation, ensuring that every aspect of the application process is transparent, accountable, and rigorous. The practice of conducting and recording interviews adds an additional layer of security to the CBI programme and helps maintain its integrity and high standards.

  1. Prohibition of Mailing Official Citizenship Documents

The principle concerning the prohibition of mailing official citizenship documents and passports to new citizens signifies a step towards tighter security measures. The EU Commission recommends against the dispatching of sensitive materials such as citizenship documents and passports through mail services, a method that can potentially expose these critical documents to loss, theft, or fraud.

This principle seeks to protect the sanctity of citizenship and reduce the potential for misuse of identity. Instead, newly granted citizens should receive these documents through secure, reliable, and verifiable means, such as in-person collection or the government shall identify alternative means.

  1. Increased Investment Thresholds

The principle regarding increased investment thresholds mandates a higher minimum investment for CBI applicants. According to this principle, for applications made under the donation option, the minimum investment should be raised to a tleast US $200,000, while for applications made under the real estate option, the minimum investment should be at least US $400,000.

This increased financial requirement aims to ensure that CBI programmes attract individuals with a significant capacity to contribute economically to the host country. It also underscores the seriousness of the commitment required by applicants, reinforcing that the citizenship offering is not merely a commodity for sale, but a significant and meaningful alliance between the applicant and the host nation.

  1. Direct Transfer of Invested Amount to Host Country

This principle emphasizes the direct transfer of the investment funds to the host country without any diversions to accounts in other nations. It aims to ensure transparency, traceability, and the legitimate use of funds in the CBI programmes.

This requirement not only helps in the economic development of the host country by guaranteeing the direct inflow of funds but also prevents potential misuse of the programme for illicit activities such as money laundering or tax evasion. By insisting that all investment funds reach the host country directly, this principle strengthens the financial integrity and accountability of the CBI programmes.

  1. Citizenship Promotion Not Based on Visa-Free Access Benefits

This principle addresses how citizenship under the Citizenship by Investment (CBI) programmes should be marketed and promoted. The EU Commission stipulates that the promotion of such citizenship should not be primarily based on the advantages of visa-free access to the EU, UK, or any other country providing similar advantages.

The essence of this principle is to shift the focus from simply purchasing a global mobility advantage, to a more comprehensive commitment to the host country. It aims to ensure that applicants are not solely driven by the convenience of global travel, but also value and respect the responsibilities and privileges that come with the citizenship of the host country. This in turn maintains the integrity of citizenship as a deep and meaningful connection to a nation, rather than just a transactional convenience.

These recommendations serve as guiding parameters for countries offering such programmes, promoting robust measures that balance the economic advantages with stringent legal and ethical obligations.


Source: Associate Times