The Council of Ministers reaffirmed today the Government’s willingness to strictly adhere to the criteria, terms and conditions that govern the Cyprus Investment Program, as well as the overall carrying out of enhanced due diligence checks, and decided the initiation of the procedure to withdraw citizenships of the Republic of Cyprus, the Minister of Interior, Mr Constantinos Petrides, has said.
Speaking to the press after the meeting of the Council of Ministers, the Interior Minister noted, inter alia, that “at today’s meeting, the Council of Ministers decided the following:
I. To reaffirm the Government’s commitment to strictly adhere to the criteria, terms and conditions governing the Cyprus Investment Programme, as well as the overall carrying out of enhanced due diligence checks, and more generally, the strict implementation of the entire framework of the processes governing the Cyprus Investment Program, as these have been modified/reinforced by relevant Decisions of the Council of Ministers.
II. The initiation of the procedure to withdraw the citizenship of the Republic of Cyprus, always in accordance with the current legislation, granted to 26 persons, who have been naturalized by exception.
III. To authorize the Minister of Interior to continue the process of checks of all persons naturalized by exception until 2018, the year when new stricter checks were put in place.
IV. The setting up of a three-member Committee comprising the Accountant General and President of the Cyprus Public Audit Oversight Board as President, the Chairwoman of the Cyprus Securities and Exchange Commission and a representative of the Law Service of the Republic, as members, which will examine the results of the new checks and submit a report and conclusions to the Council of Ministers. The Committee will also examine whether the cases for which the denaturalization process will begin by the Council of Ministers, including the 26 aforementioned applications, were approved according to the applicable regulations and criteria at the time of their approval. Moreover, the Committee will be able to make suggestions and recommendations for the further improvement of the Cyprus Investment Program.
It is understood that in a case where, during the course of the new investigation, any disciplinary or criminal offenses by any person are found, the regular procedures shall be followed. This provision was made in consultation with the Attorney General of the Republic.
V. To authorize the Minister of the Interior to immediately send the Regulations which will define the scope of application of the Cyprus Investment Program to the Law Office of the Republic for legal examination and subsequently to submit them to the Council of Ministers and the House of Representatives for approval.
VI. Bearing in mind that since January 2017 there is a requirement to submit to the Ministries of Interior and Finance an annual certificate of progress on the construction work, issued by the project designer, to authorize the Ministers of Finance and Interior to intensify their audits as regards the progress of the investments made under the Cyprus Investment Program before 31/12/2016, so as to take appropriate measures.
VII. To reaffirm the ban on advertising the Cyprus Investment Program, in accordance with the provisions of the “Code of Conduct” in force, pursuant to the decision of the Council of Ministers dated 13/2/2019, under penalty of exclusion from applications, whether by real estate developers or by service providers, not excluding the deletion of those who take relevant action from the register of providers of the Ministry of the Interior.”
When asked on the procedure of the matter, Mr Petrides said that the persons concerned would have the right to lodge a complaint within a number of days, as provided for by the legislation in force, and after that a Committee will be convened to hear the complaint and refer it to the Council of Ministers.
In his reply to a question, the Minister said that “in 2013, when the Investment Plan was introduced, there were control procedures related to the fact that the investments should be carried out through the Cypriot banking institutions in order to ensure that all incoming funds and stakeholders pass through the money laundering controls implemented by the Cypriot authorities.
These audits have been carried out and made until present on the basis of the relevant instructions issued by the Central Bank of Cyprus, and applicants are obliged to include in their requests copies of transaction transfers; this condition of the investment program is fully in line with the EU-Directives on combating money laundering, and is also recognized by the European Commission’s report on schemes for granting citizenship and a residence permit for EU investors.
Also, there was an obligation for a clean criminal record, an obligation required by the authority that applicants should not be included in a list of persons whose assets are ordained to be frozen within the EU, and also information received from the State’s services is also taken into account.
Since then we have taken many further important measures to strengthen controls.”
The Minister explained that “in February 2019, safeguards have been added, for example that applicants must hold valid Schengen visas and not have been refused citizenship by any other EU country. We also set up the register for providers in order to have some control.
In the summer of 2018 we had purchased our own international data system, based on which all checks begun, information is collected from many countries and better due diligence checks are conducted. We have also introduced the provision that checks will be carried out at multiple stages. From one stage in 2013, there are currently five stages of due diligence.
The first stage is the internal checks, as in 2013, through the banks, our own information. Secondly, we have introduced the obligation of providers who have their own registry to perform checks. Third, it is our own information system that we have introduced and are now conducting our own checks. Fourth, we have agreements with three major international due diligence firms, with an open bid. These are names we have already announced that will help us with this program.
Fifth, and very importantly, in February 2019 we have introduced 11 exclusion criteria, whether or not these people are convicted or they are under investigation in other countries, whether or not they have been excluded. And it is with these criteria that we proceed. We have taken all these measures.
For the initial requests that were made without these stages of verification, we have said that there will be a re-examination. ”
He added that with the system introduced in 2018 there is a continuous recheck. He also noted that “because the above tools were not available in the beginning, applications that were approved without these will be subject to detailed scrutiny through this system.”