Friday, October 23, 2020

Cyprus top officials implicated in scheme that allows criminals to buy Cypriot passport

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Several high-ranking Cypriot officials, politicians, lawyers and real estate developers are implicated in a scheme that allows criminals to buy a European passport using the country’s citizenship through an investment programme, an Al Jazeera investigation has found.

In The Cyprus Papers Undercover, Al Jazeera reveals how the country’s highest political ranks are willing to aid and abet convicted criminals to obtain Cypriot citizenship, granting the criminal access to the European Union’s internal markets and visa-free travel.

Among those are parliamentary speaker Demetris Syllouris and member of parliament, Christakis Giovanis (also known in Cyprus as Giovani), who is also one of the country’s largest real estate developers.

The revelation comes two months after Al Jazeera’s Investigative Unit published The Cyprus Papers, a leak of 1,400 documents showing Cyprus regularly failed to adhere to its own laws and allowed convicted criminals and fugitives to obtain its citizenship.

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Following the investigation, Cyprus defended the programme, saying there had been several mistakes in recent years but the tightening of laws and applicants’ background checks were sufficient to stop criminals from obtaining a passport.

Convicted Chinese businessman

Cyprus’s citizenship through investment programme grants a Cypriot passport to anyone who invests at least $2.5m in the country, often through real estate investments.

Since 2013, when the passport programme started, the country has made more than seven billion euros ($8bn). The amount is used to keep the nation’s failing economy afloat.

Although legal, the programme has been criticised regularly by the European Union and anti-corruption NGOs, saying it has facilitated the laundering of stolen assets from Russia and beyond.

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Using an undercover operative called Billy, who claimed to represent a Chinese investor sentenced to seven years in prison for money laundering, Al Jazeera’s Investigative Unit gained access to some of the country’s highest-ranking politicians involved in the scheme.

From the start, Billy was open about the prison sentence, which would officially disqualify the non-existing applicant for the Cyprus Investment Programme (CIP).

However, Billy was told by a real estate developer all the way up to the speaker of parliament that the prison sentence would not be an issue as long as enough money was invested.

“That’s not the first to face this issue in Cyprus,” Andreas Pittadjis, a registered service provider for the CIP, told Billy. “I had a guy who was in custody for two years.  He was in prison for two years for corruption and money laundering. We had ways to justify everything and he went through with the approval of his passport application. He now has his visa waiting for him. No problems whatsoever.”

Pittadjis even suggested changing the name on the passport, which, in combination with the new passport, would allow a convicted criminal to assume a completely new identity.

“Of course we can change his name. This is Cyprus,” he said.

The lawyer’s comments were echoed by high-ranking politicians.

Syllouris and Giovani said they would do everything in their power to get Billy’s non-existing criminal employer a passport.

“It’s not easy. But I can promise, we shall do the best. And I believe we have the experience,” Giovani said.

Syllouris went even further, saying: “You can tell him that he will have, without mentioning my name or anybody else’s, full support from Cyprus. At any level – political, economic, social, everything – ok.”

Family applications

The citizenship through investment programme is popular with people from countries like Russia, China and Ukraine, granting them access to European markets while also offering an option to store their money offshore.

As a result, many businesses, such as the Giovani Group, a real estate developer founded by politician Giovani, cater specifically to wealthy investors.

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Its executive director Antonis Antoniou, said Billy’s employer should look at investing more in Cyprus – up to 20 million euros – despite knowing he was a convicted criminal.

“The more you invest you, [the more] you are in more favourable terms. You can ‘skip the waiting list’, as we say,” Antoniou told Al Jazeera’s undercover journalists.

Pittadjis explained that to solve any issues that could arise, applications are made through family members of those who are not allowed to apply themselves. The criminal, then, can apply later as a family member.

“I had a client who wanted to make an investment and couldn’t. But his wife could. I had another who couldn’t but his son could,” the lawyer said. “You cannot make problems disappear. You can solve them.”

‘System is broken beyond repair’

According to Laure Brillaud, Senior Policy Officer for anti-corruption NGO Transparency International EU, the footage shows that Cyprus’s citizenship through investment programme does not work.

“What all this shows is that it’s not just a few bad apples. It’s the system that is broken beyond repair,” Brillaud told Al Jazeera while calling on the EU to take action to change the passport schemes currently in place.

Response from those involved

In response to questions from Al Jazeera, Pittadjis said he understood from the outset what was proposed involved money laundering and criminal activities and that everything he did thereafter amounted to “fishing for more details”.

He also indicated that, a few days after Al Jazeera’s journalists left Cyprus and failed to provide him with a copy of the proposed applicant’s passport, he reported it to Cyprus’s anti-money laundering unit.

Giovani and Antonis Antoniou of the Giovani Group told Al Jazeera they shared their suspicions regarding the proposed applicant with Pittadjis.

They said their dealings with our undercover journalists were intended to gather information to support a report to the authorities without “tipping them off”.

Syllouris said that he provided no services to the applicant and referred to the anti-money laundering report subsequently made by Pittadjis.

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