A leaked list of names reveals the extent to which Russian and Ukrainian politically elite have driven Cyprus’s citizenship-by-investment schemes which, according to the government, has generated over €4B in Cyprus based investments since 2013.
Prior to 2013, Cypriot citizenship was granted on a flexible basis by MPs, in a less strict version of the current agreement.
“Golden visa” schemes, whereby countries give passports or citizenship in exchange for investment, are almost completely carried out in complete confidentiality. Only Malta has ever published the names of its applicants.
Several of the hundreds of applicant’s are wealthy or prominent businesspeople with significant political influence in their home jurisdictions, a few of the most notable being:
- Leonid Lebedev, a former Russian Member of Parliament and the owner of the Sintez Group acquired Cypriot citizenship. His personal wealth is estimated by Forbes to be more than USD $1 B.
- Gennady Bogolybov and his former business partner Igor Kolomoysky founded and were Majority Shareholders in PrivatBank until it was nationalised by the Ukraine government last year The Ukraine central bank later purported that the two partners had stolen £4M from PrivatBank.
- Nikita Mishin, founder and commercial director at Severstaltrans and former member of the Expert Council of Russia, a non-governmental body of advisers.
- Konstantine Stetsenko is the managing partner of Invest Capital Ukraine, which was commissioned to advise former Ukrainian Prime Minister Petro Poroshenko on the sale of his confectionary business.
- The billionaire Teddy Sagi obtained Cypriot citizenship in 2009. The majority shareholder of the company that owns Camden Market in the UK, he also founded Playtech, a gambling software and services company.
Little-known outside wealthy circles, the golden visa industry first came into existence in the 80s, when the exotic islands of St Kitts & Nevis first decided to bring additional foreign investment into the country in return for passports.
Countries across the world copied the concept with their own schemes to provide foreign investors with residency visas or citizenship or Passports in exchange for funds or furthering the economy. Investment in real estate and property, or hiring locals are often key elements of the requirements.
Boutique firms offering assistance to those potentially in need of a second or third passport advertise schemes in at least a dozen countries, including the UK.
Advocates of the industry argue that such programmes attract talent and wealth at a time when struggling countries are facing budget deficits. Some also argue that the schemes grant those with entrepreneurial ability the chance to seek a better life outside oppressed or corrupt jurisdictions.
Critics are quick to respond, claiming them to be cynical and gluttonous that undermines the notion of citizenship. Although secretive, the industry has suffered several scandals in recent years.
Eleven Portuguese civil servants and golden visa holders were arrested in 2013 after a police investigation that examined the golden visas candidates’ legitimacy. In the US, the former company of Trump son in law and Adviser has recently been exposed as gifting visas to Chinese investors who buy into one of the company’s construction projects.
In a previous article we spoke about the Kazakh businessman accused of a multi-billion dollar fraud on his own bank was issued with an “investor visa” by the UK government, despite informing them that the cash had been provided to him by his father.
Interest in the UK’s Tier 1 Investor visa crashed after new rules were put in place requiring more stringent financial checks.
Even the original innovator St Kitts & Nevis has been unable to escape indignity after the 2014 Financial Crimes Enforcement Network issued an advisory notice warning that convicts were buying St Kitts passports “for the purpose of furthering illicit financial activity”.