A Summary of Investigations, Reports, and Legal Actions on Cyprus CIP So Far

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It all started with a leak.

Al Jazeera’s infamous “Cyprus Papers”, published on the 23rd of August, 2020, kicked off a whirlwind of news, accusations, and questions about the integrity of the Cypriot Citizenship by Investment Program (CIP) and the administration running it.

The news outlet would claim it had documents proving that applicants with a criminal background or who did not meet the criteria were still awarded citizenship. Responses came crashing down from Cypriot government officials and newspapers, with the spat taking on geopolitical overtones. 

Al Jazeera, subsequently, published an hour-long video of its undercover journalists meeting with service providers and high-ranking officials such as House President Syllouris, MP Christakis Giovanis, and others, that showed various parties appearing to be willing to bend the rules to assist a Chinese businessman with a questionable past get a passport. The video was riddled with disconcerting content; at one point, one of the parties in question was asked if he could change the investor’s name and if he’d done it before, to which he responded “of course, this is Cyprus”.

Reckoning

Bedlam ensued. Giovanis resigned, Syllouris abstained from carrying on his duties, and, eventually, the Cyprus shut down the CIP.

The CIP would cease to exist on the first day of November 2020, and while no extensions were given and investors and their legal representatives scattered to complete their applications, things were still getting heated. 

The Cypriot government tasked an independent committee, headed by ex-justice Myron Nicolatos, with investigating the dealings within the CIP from its date of launch until its suspension.  

An official inquiry into the now-suspended CIP found that the government broke its own laws on several occasions while granting passports under the program. 

The committee, headed by ex-justice Myron Nicolatos, delivered a detailed, 780-page report of the nine-month investigation to the nation’s Attorney General on Monday the 7th of June. 

The investigation findings pointed towards malfeasance within the parameters of the CIP.

“It’s obvious the Citizenship for Investment program operated from 2007 to 2020 with gaps and shortcomings, an inadequate legislative framework and almost no regulative framework,” Nicolatos commented at the time.

Former Supreme Court President Nicolatos stated that, out of the 6,779 passports issued during the 13-year lifetime of the program, 53% of them were illegally issued to dependents of the principal applicant. 

“Specifically, from the 6,779 naturalizations […] 3,609 individuals, or 53%, concerned family members and company executives, who were naturalized unlawfully,” said the commission head. 

Nicolatos highlighted that the government’s chief legal advisor warned the authorities, in 2015 and 2016, that issuing passports to dependents could be illegal, yet they continued to issue them regardless. 

“While having Legal Service opinions issued in 2015 and 2016, that the naturalization of investors’ family members was potentially unlawful, the interior ministry continued the same practice until 2020, the year the law was amended,” Nicolatos said.

Out of the remaining passports granted to principal applicants, a third did not meet all the required criteria, Nicolatos said, as 8% did not meet the minimum investment amount, while 12% failed to prove ownership of a permanent residence on the Mediterranean island. 

Nicolatos faulted service providers such as lawyers, banks, property brokers, accountants, and others, along with the government. He said they “did not sufficiently meet their legal or other obligations” throughout the application process while condemning a lack of supervision from the authorities. “[…]absent were those safety valves, the proper legal guidance as well as adequate supervision regarding existing laws and regulations.” said Nicolatos. 

Private sector parties found at fault may face both criminal and civil charges, while officials and politicians may bear political responsibility. 

The four-member commission headed by Nicolatos recommended that the government look into revoking citizenship in 85 cases in which applicants may have committed criminal charges to secure a passport. A redacted interim version of the report shared with the public in April highlighted fugitives “piggy-backing” on their spouse’s application as well as properties being recycled for CIP applications through “cancel and release” agreements.

No sleep for the wicked

President Nicos Anastasiades commented on the report today, saying: “Unfortunately, it was an enduring failure on behalf of respective governments to carefully look into the gaps, shortfalls, and weaknesses exploited by devious individuals who should not be sleeping peacefully,” adding that the report was well structured and thorough.

The president added that he will ensure his administration would assume its share of the responsibility, although that share could well be higher than the president expects.

Out of the 6,779 naturalizations under the CIP, 96.5% of them came during Anastasiades’ administration between 2013- and 2018. The Tassos Papadopoulos administration, meanwhile, saw only five naturalizations between 2003 and 2008, while Demetris Christofias’ government oversaw 228 naturalizations during its five-year reign from 2008 to 2013.

Attorney General Savvides is ensuring some parties are not getting any sleep in the time being, stating that authorities will examine revoking citizenships, charging lawbreakers, and take disciplinary action in those incidents that the commission report recommends.

Savvides and his office has already taken legal action; they took five individuals and four entities to court last month, and the accused are now facing 37 charges in relation to the commission’s findings. 

Savvides stated that a version of the report will be made public in due course but shall be redacted to not compromise any legal proceedings.