European Commission Finds Lack of Oversight in ‘Golden Visa’ Programs

The European Commission said Wednesday it plans to form a group to examine risks associated with citizenship-by-investment plans, after finding in a report that oversight is lacking in many European Union countries that offer them.

The programs provide European passports to wealthy people from across the world in exchange for a form of investment. Such passports, often referred to as “golden visas,” provide freedom of movement across the 26 countries in the EU’s document-free travel zone known as the Schengen area, among other benefits.

The programs are regulated at the member-state level, and the commission’s report found a lack of oversight in some countries can draw in people seeking to hide or launder money or evade taxes. Golden visas also have received public scrutiny amid global tensions around migration.

The commission said it plans to form a group of experts from European member states to look at the programs’ risks, and called for the development of a common set of security checks and risk-management processes that account for the potential of, among other things, money laundering and tax evasion. The experts should produce that report by the end of the year, the commission’s report said.

“We want more transparency on how nationality is granted and more cooperation between member states,” Věra Jourová, the European commissioner for justice, consumers and gender equality, said in a statement. “There should be no weak link in the EU, where people could shop around for the most lenient scheme.”

Anticorruption groups Transparency International and Global Witness, which released a joint study last year on the corruption risks of golden visas, said Wednesday that the measures sought by the commission aren’t adequate. They called for stricter due-diligence measures and an EU-wide enforcement of the standards.

“This report firmly puts the spotlight on dubious schemes in member states, which is a good first step,” said Laure Brillaud, an anti-money-laundering policy officer at Transparency International. “However, we see little incentive for countries like Malta to scrap these lucrative schemes without strong action from international institutions such as the EU.”
Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.co from Wall Street journal (The Wall Street Journal is a U.S. business-focused. The Wall Street Journal is one of the largest newspapers in the United States by circulation).
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