REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS 1. Introduction Recent years have seen a growing trend in investor citizenship (“golden passport”) and investor residence (“golden visa”) schemes, which aim to attract investment by granting investors citizenship or residence rights of the country concerned. Such schemes have raised concerns about certain inherent risks, in particular as regards security, money laundering, tax evasion and corruption. Three Member States operate investor citizenship schemes, where citizenship is granted under less stringent conditions than under ordinary naturalisation regimes, in particular without effective prior residence in the country concerned1. Such schemes have implications for the European Union as a whole, as every person holding the nationality of a Member State is at the same time a citizen of the Union. Indeed, although these are national schemes, they are deliberately marketed and often explicitly advertised as a means of acquiring Union citizenship, together with all the rights and privileges associated with it, including in particular the right to free movement. Investor citizenship schemes differ from investor residence (“golden visa”) schemes, which aim to attract investment in exchange for residence rights in the country concerned, and exist in twenty EU Member States. However, the risks inherent to such schemes are similar to those raised by investor citizenship schemes. Furthermore, these schemes impact on other Member States as a valid residence permit grants certain rights to third-country nationals to travel freely in particular in the Schengen area. The European Parliament, in its Resolution of 16 January 2014 2, expressed concern that national schemes involving the “direct or indirect outright sale” of Union citizenship undermined the very concept of Union citizenship. It called on the Commission to assess the various national citizenship schemes in the light of European values and the letter and spirit of EU legislation and practice. The Commission contacted the Bulgarian, Cypriot and Maltese authorities for further information on their schemes. In a debate in May 2018, the European Parliament discussed a range of risks associated with investor citizenship and residence schemes. In its 2017 Citizenship Report3, the Commission announced a report on national schemes granting Union citizenship to investors describing the Commission’s action in this area and examining current national law and practices, and providing some guidance for Member States. To prepare this report, the Commission commissioned a study on the legislation and practice pertaining to citizenship and residence schemes in all relevant Member States 4 and 1 2 3 4 See Section 2.3. below for a definition of effective residence. European Parliament Resolution of 16 January 2014 on EU citizenship for sale (2013/2995(RSP)). Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Strengthening Citizens’ Rights in a Union of Democratic Change: EU Citizenship Report 2017 (COM/2017/030 final). Fact finding study. Milieu Law and Policy Consulting, Factual Analysis of Member States' Investor Schemes granting citizenship or residence to third-country nationals investing in the said Member State, Brussels 2018 (“the Study”). 1