Enhanced Due Diligence Checks for Passport by Investment Applicants

The government will soon be applying enhanced due diligence checks on foreign nationals who from now on apply for Cypriot passports via the citizenship-by-investment scheme, while at the same time it will comb through past naturalisations to ensure they comply with up-to-date eligibility requirements.

Interior Minister Constandinos Petrides said on Tuesday that, following a tender, three firms have been pre-selected to supply background screening services to the government.

Separate contracts are due to be signed with the firms in December.

The firms are: Sterling Diligence, S-RM Intelligence and Risk Consulting, and Kroll.

Petrides said the firms would be carrying out “enhanced due diligence checks” for the Cypriot government on individuals applying for the citizenship-by-investment scheme.

The Cyprus Mail understands the contracts will run for at least one year, with each firm required to perform an X amount of checks while under contract. Their work will apply only to new citizenship applications to be filed as of December this year.

Kroll, one of the firms, is a corporate investigations and risk consulting firm based in New York City.

The company held the security contract at the World Trade Centre at the time of the September 11, 2001 terror attacks.

An internet search reveals that in 2005, as part of a broader operation to crack down on industrial espionage, the government of Brazil formally indicted Kroll’s Brazilian chief executive and five other Kroll employees on criminal charges, including bribery and various breaches of Brazil’s data privacy laws.

In addition to tighter screening going forward, Petrides said also that in the meantime the interior ministry will be utilising existing tools to go through cases of naturalisations granted in the past.

The internal audit will cover the period 2008 up until 2018, when the criteria were tightened. The tool currently being used is a subscription-based database of persons and corporations.

Should any cases turn up where citizenship was granted to individuals who satisfied the criteria at the time of naturalisation, but who subsequent to naturalisation faced criminal charges at their place of residence, or else were placed under EU sanctions, the ministry could initiate a process to revoke their citizenship.

The decision to revoke citizenship would be taken by the cabinet, upon the interior minister’s recommendation.

The move comes in the wake of reports that eight family members or allies of the Cambodian leader, including the country’s police chief who has been instrumental in clamping down on dissent in Cambodia, and its finance minister, had received Cypriot citizenship in 2016 and 2017.

The citizenship-by-investment programme has undergone several revisions since 2013. The latest were introduced in February this year after warnings from the EU. The new stipulations state that applicants must have a Schengen area visa and persons who applied for citizenship in any other EU member state and were turned down were not entitled to obtain Cypriot citizenship as part of the scheme.

To ensure that all incoming funds are not part of money laundering schemes, all transactions also require the investments in Cyprus to be carried out through Cypriot banks. Investments carried out with cash are not allowed.

In addition, as of February 2019 Politically Exposed Persons were no longer eligible for the programme.

The government has announced a probe into the Cambodia-related cases specifically. In parallel, the interior ministry said it would be conducting a broader audit (as opposed to an investigation) into past cases of naturalisation.

The administration is taking flak over its naturalisation scheme after it emerged that the law firm bearing the president’s name was part of the passport industry, as was that of former minister Marios Demetriades whose father’s law firm is among the top passport sellers.

It turned out it was Andreas Demetriades & Co LLC which secured the citizenships for the Cambodian elite.

Interior ministry data showed the firm was involved in 137 applications between 2014 and 2018, a period during which Marios Demetriades was a member of the cabinet that approved them.

President Nicos Anastasiades has vowed to step down should he or his law firm be implicated in any wrongdoing or quid pro quo in the controversial investment programme.

The optics for the government got worse on Sunday, when a fresh report said citizenship was granted in 2016 to a Saudi sheikh, whose late father had been alleged to have had ties to terrorist financing. However, neither the sheikh nor his father were ever charged for links to terrorism.


Source: cyprus-mail.com
Published: 29 October 2019

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