The European Economic and Social Committee (EESC) has endorsed a report calling for an end of on Investor Citizenship and Residence Schemes in the European Union.

The European Economic and Social Committee (EESC) is the voice of organised civil society in Europe.

"Nationality is a bond between a citizen and a state, whether by birthright or by naturalisation. However, in recent years several EU Member States have set up investor citizenship and residence schemes to attract investment. According to an opinion adopted by the European Economic and Social Committee (EESC) at its October plenary session, this practice poses serious risks and should be banned in all EU Member States," a statement by the Committee read.

"In the last decades, the financial crisis has triggered a need to increase revenues in many EU Member States, who have set up schemes allowing third country nationals fast-track access to EU citizenship or residence in exchange for making a significant investment in the Member State in question: the so-called ‘golden passports' or ‘golden visas'. The EESC called these practices into question in its opinion on Investor Citizenship and Residence Schemes in the European Union and urged member States to phase out these schemes or provide reasonable arguments for not doing so."

"The EESC opinion endorses a recent report of the European Parliament, which also calls for an end to all existing schemes as soon as possible. A report issued by the European Commission also points out that these schemes pose risks in terms of security, money laundering, tax evasion and circumvention of EU rules," an EESC statement read.

"There are currently between 17 and 20 investor citizenship and residence schemes in the EU. According to a joint report issued by Transparency International and Global Witness in 2018, these schemes have given the EU more than 6,000 new citizens and 100,000 new residents since 2008, and Member States have attracted around €25 billion in foreign direct investment."

Jean-Marc Roirant, rapporteur for the EESC's opinion, underlined that these schemes often do not comply with the fundamental rights underpinning European cooperation and insisted on the need to phase out the schemes across the EU: The EESC is very worried about the promotion of EU rights and EU citizenship as a product for sale," Roirant said.

To address these potential risks, the EESC said that it endorses the work of the group of Member State experts set up by the European Commission. According to the EESC, until the "golden visa" and "golden passport" schemes are phased out, this group should focus on setting minimum standards for due diligence and security checks and for the operational integrity of the schemes.

The EESC also recommends that the Commission establish a coordination mechanism that allows Member States to exchange information on successful and rejected applications for citizenship and residence in order to avoid "passport-shopping" or "visa-shopping" between jurisdictions by risky individuals.

The opinion also recommends that all agents and intermediaries providing services to applicants be subject to EU anti-money-laundering rules and calls for clarification of the role of the private sector, with the introduction of an obligatory code of conduct, supervision of regulated professionals and establishment of a publicly accessible Registry of Service Providers in this field.

Lastly, the EESC recommends that, while working towards a phase-out of existing schemes in the EU, accession countries should not be allowed to run their own schemes when they join, so that no new schemes are added to the ones currently in place.