entities in that Member Stateˮ92. However, the Directive lays down these obligations only in relation to economic operators and does not cover governmental organisations and agencies, which are not obliged entities under the Directive. This means that the authorities responsible for investor citizenship and residence schemes are not covered. The study showed a variety of practices by investor citizenship schemes to combat money laundering and also pointed to a number of grey areas. Formally, there is no obligation on the bodies involved in carrying out the checks on the origin of funds in investor schemes to communicate to the Member States’ competent authorities the results of these checks. However, in practice some cooperation exists in relation to investor citizenship schemes. Identity Malta93 confirmed, for the purposes of the study, that the due diligence definitions and procedures of the fourth Anti-money Laundering Directive are followed in the four-tier process of due diligence it uses. The Cypriot legal framework on investor citizenship schemes makes direct cross-reference to the Cypriot anti-money laundering legislation. This requires Cypriot Banks’ compliance departments to implement due diligence measures to verify and validate the origin of the funds used in the investment. In Bulgaria, the check on the origin of funds (in accordance with the Bulgarian Law on Measures against Money Laundering) is carried out by the Invest Bulgaria Agency94. In this procedure the applicant must provide a declaration of the origin of funds in compliance with the anti-money laundering law95. Similarly, there are variable practices among Member States operating investor residence schemes to guard against money laundering. While some Member States require all payments to be made through their national banks, which as obliged entities under the fourth AntiMoney Laundering Directive, must apply the necessary customer due diligence checks (Cyprus), the study also showed that some legislation does not provide for particular checks (Croatia, Portugal). In Hungary, where the scheme is currently suspended, there was no obligation to actually transfer the money to the Hungarian territory, which, as a result, excluded the funds from checks. In other cases, funds are double-checked, first through evidence submitted by the country of origin of the fund, and then by the competent services in the Member State (Ireland). The competent authorities in charge of those particular checks vary: it can be the national investment agency (Bulgaria) or a Commission dedicated to antimoney laundering (Spain). These entities can be private or public and include independent professionals. These checks differ as they can consist in validating the documents relating to the monies used to make the investment, such as bank transfer receipts, financial statements tax return report, purchase or lease contract from the land or property registries, when the investment is immovable property, or they can consist of a limited declaration of the competent authority. As provided for by new EU anti-money laundering rules, Member States should devote particular attention to enhanced customer due diligence in the context of investor citizenship and residence schemes. Member States should ensure that the application of EU rules on antimoney laundering is not circumvented. This should be ensured when funds are paid by 92 93 94 95 See Article 1, point 44, which adds an additional point into point (1) of Annex III of the fourth Anti-money Laundering Directive. The due diligence checks are currently made by the Malta Individual Investor Programme Agency; at the time the interviews for the Study were conducted, the authority in charge was Identity Malta. The Invest Bulgaria Agency is an executive agency of the Bulgarian Minister of Economy and supports the Minister in the application of the state policy in the field of encouragement of foreign investment. Article 39, paragraph 6 of the Regulations for the Application of the Foreign Nationals in Bulgaria Act. 15