Cyprus just shut down a program providing passports to anyone with a spare $2 million amid scandal

By Taylor Borden, Business Insider

Interest in secondary citizenship — which can cost millions— has been surging amid the pandemic.

Nuri Katz, the founder of financial advisory firm Apex Capital Partners, estimated that roughly 25,000 people will acquire citizenship through investment programs this year. In 2017, that number looked more like 5,000.

Demand has been particularly high in the tiny nations of Montenegro and Cyprus, according to CNN, as the world’s wealthiest look to gain quick and easy access to Europe. The program’s main requirement is a sizeable investment in the country, usually in the form of real estate.

Cyprus, an emergent luxury destination and one of the most expensive secondary passports to secure at $2 million, saw a 75% spike in applications amid the pandemic.

But that pricey program is coming to an end.

Al Jazeera published footage on Monday of high-ranking Cypriot officials scheming to misuse the program.

The recording, captured by an undercover journalist, showed Demetris Syllouris, the parliamentary speaker, and Christakis Giovanis, an MP, aiming to secure citizenship for a Chinese businessman with a criminal record through an intermediary.

But that intermediary was an undercover operative.

Syllouris told the intermediary that he could expect “full support from Cyprus” as long as there was no “mentioning my name or anybody else’s,” Al Jazeera reported.

By Tuesday, Giovanis resigned and Syllouris agreed to step down while official investigations are conducted.

The government approved a proposal to suspend the country’s citizenship by investment program after an emergency meeting on Tuesday. President Nicos Anastasiades cited “weaknesses” allowing “exploitation” of the program as the rationale for the move.

The program is set to be scrapped in just a few weeks, on November 1. Since its launch in 2007, it has netted the country roughly $8 billion.

The abolition of the program comes following previous concerns about its vulnerability — namely its ability to be used for illegal activities such as money laundering.

Arthur Sarkisian, a managing director at the London-based passport broker Astons, said in a statement to Business Insider that his own clients are rushing to complete applications for Cypriot citizenship before the program disappears.

“This has caused an immediate and understandable panic amongst those currently applying for Cypriot citizenship through investment, who now fear they may miss out through no fault of their own having abided by the letter of the law throughout the process,” Sarkisian said in a Tuesday statement.

“Unfortunately, as is often the case in life, a select few have chosen to operate outside the law for their own personal gain, tarnishing the reputation of the wider sector as a result.”

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