Investor Visa Italy Investor Visa Italy / 3

EDITORIAL Residence and citizenship programs for investors in EU member states and in Italy by Raffaele Miele EU member states bound to their own laws while the Commission is trying to lay a common framework he European Commission forwarded to the European Parliament, the Council of the European Union, the European Economic and Social Committee and the Committee of the Regions a report showing the ﬁndings of a research about member states visa programs granting citizenship or residence rights to non-EU investors. The Commission tried to highlight the many risks stemming from these programs. There are many security concerns, especially regarding potential money laundering, tax evasion and corruption arising from granting citizenship rights without previous residence or, at least, without further scrutiny of the investments, barring a strictly economic one. The report shows the many chal- lenges to European governance and transparency while considering some possible solutions to address them inside a shared framework. T Some member states programs are, according to the Commission, openly breaching international law. In fact, in Bulgaria, Cyprus and Malta investment attraction programs grant citizenship rights to investors without demanding to the applicants to effectively reside there. The report quotes the 1955 Nottebohm case. The International Court of Justice, settling the dispute between Lichtenstein and Guatemala, upheld the principle of effective nationality. The national must prove a meaningful connection to the state in question, e.g. his origin, ancestry, marriage, a proven and signiﬁcant period of residence, his language or the sharing of its uses and traditions. Given this, even if citizenship laws are in the exclusive domain of EU member states, the Commission is arguing that each member state must guarantee that citizenship will not be granted lacking an effective link with the state itself. European citizenship automatically derives from being a citizen of a member state and such programs would violate the principle of loyal cooperation among EU members. This is estab- lished by article 4, section 3, of the Treaty on the European Union (i.e. the Maastricht Treaty), requiring each member state to refrain from any measure which could jeopardise the attainment of the Union's objectives. These remarks, previously stated by the Commission itself and by the European Parliament, brought Malta to amend its law. Malta now asks investors to provide a twelve-month “proof of residence”. Such requirement is satisﬁed when the applicant obtains a residence permit, even without physically residing there, provides his boarding passes showing travel to Malta and, preferably, provides evidence attesting his donations to charitable organisations, his membership of a local sports association or his income tax payments. After Malta, Cyprus also amended its legislation in 2016 granting citizenship rights to the investor and his family members only after prior issue of a residence permit. Sure enough, the Commission investigation on residence programs for investors was broader and more challenging. Compared to the three states offering citizenship schemes, twenty states implement investor residence programs: Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Croatia, Cyprus, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia and the United Kingdom. Hungary suspended its program in April 2017. According to the Commission, visa and residence programs, while quite distinct from citizenship ones, may present some security risks. They may also disrupt the application of some of the rights associated to the EU Long-Term Residence status, as they allow non-EU citizens to move freely inside Schengen, even if they are national visas and permits. According to the Commission, some obligations exist under EU law in terms of security checks to be carried out prior to the issuance of visa or residence permit to foreign investors. Nonetheless, data on the effective procedures carried out and on how member states handle discretionally these security issues are not available. Residence permits granted on the basis of an investor residence scheme requiring only a short-term residence period or none at all may also impact on the rights of the individuals possessing the EU Long-Term Residence status. In fact, these scheme would represent a fast-track procedure to obtain the citizenship of the issuing member state and thus of the Union itself. The Commission also emphasises a lack of transparency and checks of these programs, especially when it comes to monitoring and the absence of statistics on the number of people obtaining a residence permit thanks to these schemes. To address these critical issues the Commission will supervise all programs. On their end, member states will have to carry out all the 1

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