The European Commission just answered parliamentary question on OECD position on ‘residence by investment’ (RBI) and ‘citizenship by investment’ (CBI) schemes and citizenship matters.
The European Commission’s answer regarding citizenship matters..
- Each Member State to lay down conditions for the acquisition and loss of its nationality, subject to due regard for Union law.
- It is the responsibility of Member States’ authorities to perform background checks on applications for citizenship.
- The Commission is therefore monitoring citizenship investors’ schemes, including their application
Question:
On 19 February 2018, the OECD published a document in which it expressed concern at the schemes employed in some 90 countries under which foreign individuals can obtain citizenship or a residence permit in exchange for investments.
Schemes of this kind exist in Malta and in Portugal, a Member State that since 2013 has offered foreign pensioners special non-habitual resident status with tax exemptions.
Setting aside the ethical implications, CBI schemes may be used to circumvent the rules on the exchange of bank information, since individuals can take advantage of their new citizenship to transfer funds to financial institutions in a third country.
1. Does the Commission at least plan to insist that Member States which offer RBI/CBI schemes carry out stricter identity checks, in order to prevent these arrangements from being used to circumvent the rules on the exchange of bank information?
2. The OECD has launched a consultation on RBI/CBI schemes, which is due to close on 19 March 2018. Is the Commission working together with the OECD to help draw up a global action plan to tackle these practices?
Answer:
8 June 2018
E-001440/2018
Answer given by Ms Jourová on behalf of the Commission
As regards citizenship investor schemes, it is for each Member State to lay down conditions for the acquisition and loss of its nationality, subject to due regard for Union law. It is in the interest of the Member State concerned, but also of the EU in general, that such conditions include background checks on applicants for citizenship. It is the responsibility of Member States’ authorities to perform such checks.
Member States should use their prerogative to award citizenship in line with international and ECÂ law and in a spirit of sincere cooperation with other Member States. The Commission is therefore monitoring citizenship investors’ schemes, including their application. In its 2017 EU Citizenship Report, the Commission announced it would produce in 2018 a report on national schemes granting EU citizenship to investors describing the Commission’s action in this area, current national law and practices and providing guidance for Member States.
The Commission contributed to the discussions on the Organisation for Economic Cooperation and Development (OECD) consultation referred to by the Honourable Member. The goal of the exercise was to ascertain the dimension of the problem and identify any regime that has potential for misuse. The Commission will assess the outcome of this consultation with a view to ascertaining the extent to which existing regimes in EU Member States may pose a problem for the effective implementation of the directive on Administrative Cooperation(1).
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