The background
Justice Minister Dominic Raab claimed today that EU passports are being offered for sale online, giving buyers the right to come to the UK.
The pro-Brexit campaigner says Britain needs to reimpose stricter border controls to prevent people abusing the EU principle of free movement.
He brandished an advert from a Cyprus estate agent apparently offering a Cypriot passport in three months for just under 4,000 euros.
Mr Raab said: “This shows open, flagrant selling of EU passports. Once people buy these EU passports and with it citizenship of an EU member state, they have the automatic right to come to the UK because of ‘free movement’.
“Given this is already happening at scale, imagine how much worse this problem will be after the next wave of EU accessions.”
But there’s more to this “flagrant selling of EU passports” than meets the eye.
The analysis
It’s true that Cypriot passports are on sale on the internet. The processing fee offered by the company in question – Buysell – is 3,975 euros. That’s just over £3,100 at time of writing.
There is nothing illegal about this. The citizenship scheme is endorsed by the government of the Mediterranean island nation and offered by a number of different companies.
Obtaining the passport isn’t as simple as handing over a small amount of cash – there is also the small matter of the 2.5m euro investment you need to make in Cyprus.
The investment can be in the form of property, shares, bonds or other assets.
You have to submit your application as part of a group of people, but this appears to be a technicality – you don’t need to know the others.
The stake each person invests can be reduced from 2.5m euros to 500,000 euros after three years.
It’s true that once you have the passport, you get the right to live and work anywhere in the EU, including Britain, under free movement rules.
How many people are likely to go down this road? It’s hard to say, although the size of the initial investment ought to exclude most people.
Channel 4 News reporter Ciaran Jenkins got in touch with BuySell and asked them how popular the scheme is.
Sales manager Chris Hadjikyriacou said: “It’s not like that many people are buying passports. They have to have 2.5m euros to invest here – you might get what 100 people a year.
“It’s not like a large amount of people are going to come getting this. These 100 people are not going to affect you guys there. You get truckloads of people trying to cross the channel, thousands of people every day cheating. So somebody coming to buy in Cyprus, they are staying in Cyprus.”
“If the ministers are going around with our brochure they are using it as propaganda to scare them to leave the EU, it’s nonsense.”
On the potential security risk, he said: “We’re not getting Iranians and Iraqis and Muslims. The people who are buying are oriental: they’re Chinese, Asian, Korean, not muslims. They’re not extremists.
“These are very wealthy people, they’ve got nothing to do with jihad and all this stuff.
“The government of Cyprus does a a full search on them. They don’t get a passport that easy. There’s no risk involved they don’t get in that easy, they have to have a lot of money.”
Brokers who offer Cypriot citizenship stress that applicants must have a clean criminal record and can expect the government to carry out background checks. We can’t independently verify how rigorous the checking process is.
Applicants’ names must not appear on lists of people whose property assets have been frozen by the EU.
The number of times this last detail is mentioned on various websites gives us a clue as to who might be interested in using this service: Russians, as Mr Raab acknowledged in his speech.
Cyprus has long been a favourite offshore banking centre for rich Russians, and the country relaxed its citizenship rules to appease angry Russians who lost savings after the EU and IMF bailed Cyprus out in 2013.
Where else can you buy an EU passport?
Perhaps Mr Raab thinks there is something inherently wrong about offering routes to citizenship to foreign nationals in return for investment.
But it’s something many other countries in the world do, including Great Britain.
In this country you can get a Tier 1 (investor) visa if you invest “in UK government bonds, share capital or loan capital in active and trading UK registered companies”.
Funnily enough, the minimum investment is almost exactly the same as in Cyprus: £2m, which is just over 2.5m euros as of today.
But unlike in Cyprus, you don’t get full citizenship straight away. After investing £2m, you would have to live in this country for six years before applying.
If you want to settle in Britain, you can only spend 180 days a year abroad, but there is no residence requirement in Cyprus.
In fact, Cyprus currently offers one of the easiest, cheapest and speediest routes to an EU passport on the market (and it is a market).
Spain, Malta, Bulgaria, Portugal, Greece, Austria and others all offer citizenship to wealthy investors, but in most cases the stake is higher and the wait much longer than three months.
The verdict
It’s not true to suggest that you can get an EU passport (legally) for just a few thousands euros. You would also need millions to invest in Cyprus.
This makes it unlikely that people who go down this route have the ultimate aim of getting into Britain, as Dominic Raab suggests.
If they wanted to come and live here, they could just get a British investor visa instead for almost exactly the same amount.
It is fair to say that Cyprus offers easier route to full citizenship for rich investors than most countries. As far as we know, no one else will give you a passport in three months.
But many other countries, including the United Kingdom, effectively sell citizenship to wealthy foreigners.
[Update: Dominic Raab has been in touch with this comment:
“It’s just wrong to equate the ability to buy a passport in Cyprus with UK Tier 1 visas. For a start, UK Tier 1 visas don’t gain you the right of free movement across the EU, whereas a Cypriot passport does.
“It takes at least 5 years to obtain a UK passport, compared to 3 months in Cyprus. And it is ludicrous to compare the checks during either the UK visa or naturalisation process with those in Cyprus, or indeed some other EU countries.
“On that point, I found it a little surprising that a Fact Checking blog site would take the word of those flogging the passports.
“Equally, there are widespread concerns that the Russian mafia launder their money into the EU via Cyprus, so this is a route that allows those involved in organised crime to get an EU passport and travel or live freely across the EU including in the UK. “]
