EU Commission Seeks to Make “Investor Citizenship Schemes” Grounds for Visa-Suspension

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Today, the European Commission has announced several proposals it says would improve its ability to respond “more swiftly and decisively” to challenges like citizenship by investment programs by making the operation of such schemes grounds for the suspension of visa-free travel to the Schengen area.

Today’s proposal is accompanied by the publication of the Commission’s 6th report under the Visa Suspension Mechanism.

As matters stand, specific conditions must be met before the mechanism for suspending a third country’s visa-waiver agreement with the EU. These conditions are:

• a substantial increase (more than 50%) in the number of people arriving irregularly from visa-free countries, including people found to be staying irregularly and persons refused entry at the border;
• a substantial increase (more than 50%) in the number of asylum applications from countries with low recognition rates (around 3-4%);
• a decline in cooperation on readmission;
• an increased risk to the security of Member States.

The Commission today proposes to “strengthen” the visa suspension mechanism by, among other measures, expanding the grounds for a suspension to include conditions such as a country’s “insufficient alignment with the EU’s visa policy, hybrid threats, and the operation of investor citizenship schemes.”

In other words, the Commission seeks a mandate to revoke visa-free access from countries that operate citizenship by investment programs.

Concerned about high acceptance rates and name changes

Among the concerns raised in the report was the Caribbean CBI countries’ giving permission to CBI investors to change their names upon naturalization:

“[…] to various extents, all five countries allow successful applicants the possibility to change identity after having obtained citizenship by investment. In Antigua and Barbuda and Dominica, it is allowed as of five years after obtaining citizenship; in Grenada after one year; in Saint Kitts and Saint Nevis [sic], it is allowed upon obtaining citizenship.”

The Commission also questioned the high acceptance rates of the Caribbean CIPs:

“Based on the information received from the competent authorities, the Commission has concluded that all the investor schemes under assessment have a high number of successful applicants, with a total of at least 88,000 passports issued to date. For certain countries, this number is above 30,000 (34,500 passports issued by Dominica; 36,742 by Saint Kitts and Nevis). At the same time, the rejection rate is extremely low (between 3 and 6 %), which, together with the short processing times (as little as two months in some cases), raises questions as regards the thoroughness of the security screening.”

In its report, the Commission said it was “monitoring all visa-free third countries operating [CIPs]” and that “at the moment, a number of visa-free third countries are under close scrutiny due to the potential risks raised by their investor citizenship schemes, or their plans to establish such schemes.”

Moreover, the report highlighted that the EU was “especially concerned about investor citizenship schemes that are commercially promoted as providing visa-free access to the EU.”

The Commission also reiterated its admonition to Albania from last year, emphasizing that it should “refrain from establishing an investor citizenship scheme,” this time extending the same warning to North Macedonia.

Today’s statement clarified that the new grounds for suspension would automatically lead to the invocation of the mechanism for countries that operate CIPs and that suspension would remain a “mechanism of last resort”:

“The Commission’s goal is to resolve any current challenges (e.g., irregular migration resulting from visa misalignment, unfounded asylum applications, security risks raised by investor citizenship schemes, etc) diplomatically and through joint efforts with the partner countries concerned.”

Ylva Johansson, Commissioner for Home Affairs, said there were “emerging challenges related to visa-free travel that we need to be ready to address. This is why we need to reinforce our monitoring of the EU visa-free regimes and to have a stronger Visa-Suspension Mechanism.”