Citizenship for sale schemes, also known as Golden Visas, offer visa-free travel and even citizenship to the rich. For a sizeable investment, the wealthy can zip to the front of the immigration line for a growing list of attractive countries, including some in the European Union and the United States.
Critics say the system is vulnerable to corruption and outrageously unfair, investigators add that second or third passports are very useful tools for criminals, tax evaders, and money launderers who may need new identities or bolt-holes on short notice, as well as complaisant banking systems, accountants, and law firms to help handle money that can’t be easily explained.
Corruption watchdog Transparency International Portugal’s (TI PT) President Joao Paulo Batalha, told OCCRP that it has “always been Government policy … to ignore the serious risks involved, not only those concerning corruption and money laundering, but also infiltration of organized crime and terrorist networks into the Schengen area through the purchase of these visas.”
TI PT believes that parliament has voted blindly on the issue, with the government refusing to release any information on the scheme, as well as on problematic advice given by Deputy Lawyer Carlos Peixoto.
The opinion of Peixoto, who was chosen by the Parliamentary Committee on Constitutional Affairs to advise on the bill, is, according to TI PT, a clear case of a conflict of interest as he is also a lawyer for recipients of the special visa. In his advice the lawyer stated that the scheme was beneficial to Portugal's economy as it "contribute(s) to the improvement of the business of several indirect providers" among which he included "legal advice".
A report jointly released by Transparency International and Global Witness in late 2018 found that in Portugal 95 percent of total investment from the scheme has been in properties “which has contributed to increase the pressure on the real estate market and little contribution to job creation”.
Susana Coroado, vice chairman of TI PT, previously told OCCRP that “money laundering specialists have known for ages that luxury real estate is one of the best investments for criminals because they can launder a great amount of money in just one transaction and … easily resell the property and get their money back.”
And though the process of money laundering through real estate is not a new phenomenon, Coroado believes “the Golden Visa program facilitates it exponentially.”
The watchdog warns that access to the EU is the main selling point of a Golden Visa.
A US State Department report, looking into money laundering and financial crimes, found in 2017 that suspicious funds from Angola had been used to purchase Portugese businesses and real estate.
Portugal’s Parliament today also approved a proposal to include a new amendment to the scheme enabling investors putting up at least 500.000 EUR into “green projects” to be granted a Gold Visa.
“What constitutes “green projects” – investments in ecological sustainability projects – are not clearly defined, nor is the procedure to certify that these investments are indeed being made, as the Visa would be obtainable at the start of the investment project, not at the finish,“ Batalha commented.
“If approved on a second, final vote, this could create even more risks, beyond those that have been identified by Transparency International, without even ensuring that the investment is in fact coming into the country,” he argued.
The amendment proposal is due for further discussion.
The only response TI PT has so far received regarding their requests for further information on the scheme has been that there is no data that can be made available, which TI PT believes means that “nobody checks the program.”
TI PT is ready to initiate the relevant administrative and judicial procedures necessary to force the government to release information on the scheme, including how many visas have been denied or revoked, how many jobs have been created, and what risk analysis and due diligence procedures are followed when screening Golden Visas applicants.
