The recent disclosure of participant information from a Cypriot naturalization program has raised questions of its legitimacy. The program affords non-Cypriot citizens the opportunity to qualify for citizenship through a variety of investment options. These options include investments in Cypriot government bonds, real estate, or business enterprises worth at least €5 million ($5.9 million). By offering these paths to citizenship, the government ensures tax revenue of at least €100,000 ($118,000) over a three-year period through increased investment in infrastructure and promotion of business. This program follows in the footsteps of many other state and corporate actors. Such programs started with the advent of the golden visa program in St. Kitts and Nevis in 1984.
The release of recent recipients of Cypriot visas includes the names of many prominent—and politically sensitive—Russian and Ukrainian business leaders. The distribution of participants in this program reveals that investment in Cyprus from Russian and Ukrainian elites since 2013 totals around €4 billion ($4.7 billion). Among the more controversial beneficiaries of the program are Russian national Alexander Ponomarenko and Ukrainian bankers Gennady Bogolyubov and Igor Kolomoisky. Ponomarenko, an industrialist whose net worth is $3 billion, reportedly commissioned the construction of a palace for the personal use of Russian President Vladimir Putin. Bogolyubov and Kolomoisky, former business partners, founded PrivatBank, which has since been nationalized by the Ukrainian government. Neither Bogolyubov nor Kolomoisky deny their Cypriot citizenship, but allegations of embezzlement against the two are part of an ongoing legal investigation. Many other members of this program have similarly complicated investments in both public and private economic activity in their home countries.
The release of this list of participants comes amid other scand
als involving the golden visa. Scandals broke regarding corruption in Portugal’s golden visa program in 2013, Maltese visa distribution in 2014, and in the birthplace of the program itself, St. Kitts and Nevis in 2014. Most recently, reports of questionable visa distribution have surfaced regarding the former company of President Donald Trump’s son-in-law and advisor Jared Kushner offering American visas to Chinese investors as well as a business deal between a fraudulent son of a Kazakh businessman and the U.K. government.
The Cypriot visa program specifically stipulates that “the applicant must have a clean criminal record.” However, as the main source of Cypriot investments, Ukrainian and Russian nationals oftentimes operate within corrupt systems, making this requirement for a clean record almost unenforceable. In addition, much of the criticism surrounding this program targets the opening of access to EU benefits and protections to non-members and the potential increase in large, unused property purchased for the sake of citizenship. While there is not yet wrongdoing inherent in this visa-investment exchange, the effects on the EU and Cyprus’ economy remain uncertain.