Cyprus may end up in court facing the European Commission for selling EU citizenship to wealthy individuals with possible criminal backgrounds, the euobserver.com reports.

The statement from the EU Commission on Tuesday follows revelations by an undercover team of Al Jazeera journalists.

The investigation covertly filmed Cypriot politicians willing to bend the rules to secure an EU passport for a bogus Chinese businessman with a criminal record.

"We watched in disbelief how high-level officials were trading European citizenship for financial gains," a European Commission spokesperson said of the Al Jazeera expose.

He said the commission is currently looking into compliance with EU law on the Cypriot scheme "in view of possible infringement proceedings."

The commission is also looking into similar schemes in Bulgaria and Malta.

On Tuesday, Cyprus announced that it will be suspending its citizenship for investment programme, following reports of abuses of a system that gives the rich a passport and visa-free travel throughout the EU.

Also known as the 'Golden Passport', it allows people from outside the European Union to purchase citizenship for large sums of money.

The euobserver report in full may be found here