This article is more than 1 year old

This article is more than 1 year old

The European commission is facing criticism for failing to crack down on the abuse of schemes that allow wealthy families from China, Russia and other non-European states to purchase the right to live in the EU.

Campaigners said a widely anticipated action plan published by the commission on Wednesday morning had fallen short of the measures needed to reduce the risk posed by the influx of new EU citizens from countries with high levels of corruption.

The commission said some of the schemes used by member states posed “serious security risks”. It said so-called golden passport and golden visa programmes had undermined controls on money laundering, tax evasion and other forms of corruption.

'Golden visa' schemes pose risk to EU security, Brussels to say Read more

But while the problem had been clearly flagged by Brussels, critics said its proposed remedies were “half-hearted”.

In the last 10 years, European states have granted citizenship to about 6,000 people and residence permits to a further 100,000, typically in exchange for investments in government bonds and property.

Two member states, Malta and Cyprus, sell citizenship. A third country, Bulgaria, announced a day before the report’s release that it would be ending its citizenship programme. A further 20 countries, including the UK, operate investor visa schemes and many of these offer a fast track to permanent residency.

“The sale of civil rights poses a serious threat to our security and the fight against corruption in the EU,” said the Green MEP Sven Giegold, who has campaigned for the practice to be abolished. “The commission’s proposal is half-hearted and was presented only at the insistence of the European parliament.”

The Greens want binding minimum standards and a new European law to curb abuses.

“The tide is turning on the golden visa industry with the EU recognising the unacceptable security and corruption risks they create,” said Naomi Hirst of the anti-corruption group Global Witness. “However, the commission’s report tells us nothing about what member states actually need to do”

The EU report and action plan put forward proposals for an expert group to monitor how schemes are operated, aiming to develop common security checks by 2019.

The European commissioner for justice, Věra Jourová, who ordered the report, said that in future, people obtaining an EU nationality must have a genuine connection to the member state. Malta, for example, does not require the buyers of its passports to have ever lived in the country.

“We want more transparency on how nationalities are granted and more cooperation between member states,” she said. “There should be no weak link in the EU, where people could shop around for the most lenient scheme.”

Speaking to journalists, Jourová said she hoped EU action would have “preventative power” and act as a warning to member states. Common work via the expert group would help member states “to understand what is desired and not desired”, she said.

The British government announced it was suspending its golden visa scheme last month, but revealed a few days later the change had not been implemented.

The tier 1 investor visa gives individuals UK residency in exchange for investing £2m in UK bonds or shares through a bank, with the right to apply for citizenship after five years.

In the UK, the super-rich can pay up to £10m to convert residency into permanent leave to remain within two years. To qualify, they are required to spend six months of the year in Britain.

Brussels is likely to pay attention to UK rules for foreign investors after Brexit. The EU and UK have yet to negotiate future arrangements on immigration and travel, although both agree on visa-free travel for short-term visits.

Dimitris Avramopoulos, the EU commissioner for home affairs, said he would not speculate on Brexit.

The commission rejected suggestions it had not consulted companies running the schemes. Jourová said she had spoken to representatives in Malta of Henley & Partners, one of the firms that specialises in obtaining residency and passports for tycoons.

The report flags concerns about countries outside the EU whose citizens have visa-free travel rights for short stays in Europe. Caribbean states including St Kitts and Nevis and St Lucia have raised millions by selling citizenship and easy access to Europe, combined with zero or low tax on personal incomes, have made their passports popular with foreign buyers. St Kitts and Nevis passports have also been acquired by corrupt businessmen and Iranians seeking to evade sanctions.

The commission vowed to monitor visa-free countries “as part of the visa suspension mechanism”. Countries that fail to make proper checks, and so endanger public policy and internal security within the EU, could have their travel privileges revoked.