In addition to the list of entities that will be entitled to provide services related to the Cypriot investment program through which naturalization is granted to foreign investors, developers and real estate agents will remain, based on the rules under discussion before parliament.
The regulations as well as additional bills were examined yesterday by the working committee, in the presence of Interior Minister Nikos Nouris, who outlined the most important changes in the process of naturalization of foreign investors, noting three key changes.
These include linking regulations to the law on money laundering, controlling providers who will now be responsible for their customers, and expanding the areas in which program beneficiaries can invest.
He made special reference to the obligation included in the regulations regarding the payment, among others, of € 75 thousand to the Cyprus Land Development Organization. “Based on mediocre estimates, if at least 200 naturalizations are made per year, the income for the COMP will be € 18 million. Our goal is to channel the amount for the development of the affordable housing program, to reduce rents and housing for people who meet the requirements criteria “, said Mr. Nouris.
The minister spoke of a plethora of safety valves and a clear way in which a citizen can be deprived of his citizenship, describing the establishment of a register of providers and their supervision as the most important control.
Speaking before the committee, Dimitra Kalogirou, head of the capital market committee and the three-member ad hoc committee that reviewed 29 naturalization cases, said insurance valves had been included. “The only way was to connect with the law to fight money laundering, which we have been working on for years,” he said.
There are four categories of providers for an investment program
Ms. Kalogirou referred to the determination of service providers related to the Cypriot investment program, noting that four categories of providers have been identified that have been audited for a long time and can follow the auditing standards required by law for money laundering.
These are investment services companies, fund managers, auditors and lawyers.
Ms. Kalogirou noted that the register of providers currently maintained includes other persons who, in her opinion, should not be included and who should be deleted when the legislation is passed, as they do not have the ability and tools for effective proper control. custody of their customer.
As mentioned, such categories of providers that will be left out are developers and real estate agents. Regarding the developers, Mr. Nouris noted that “they are no longer in the providers, for obvious reasons.”
Hole in program control
An important tool introduced by regulations is the supervision of providers through the relevant committee. Ms. Kalogirou said that the committee that needs to be strengthened will undertake to supervise, impose sanctions, delete providers and report them to the other competent authorities if they do not carry out the necessary control of their client.
He noted that the Ministry of the Interior should also set up an information unit to continuously monitor the naturalized investors so that it is clear that up to 10 years after their naturalization, no criminal charges have been brought against them. Europol or Interpol for a serious crime, “he said.
“This is how we cover the old ones that have been naturalized until today, as well as the new ones that will be naturalized to ensure the reliability of the program,” he noted.
He added that if the regulations are passed, “we will be more reliable because there is a hole that investors were not controlled before.” Now they will be controlled like all other investors, “he said.
The head of MOKAS, Mr. Papakyriakou, referred to the connection of the regulations with the legislation concerning identity check, income source and control of investors, noting that it is correct for the purposes of a single regulation.
He added that the connection was not a requirement of Moneyval, but that it was positive that Cyprus was moving forward, he said.
Raw remarks from MPs
The members of the committee addressed a number of questions to the Minister of Interior regarding the proposed regulations, with some not failing to address the problems and negative reports that Cyprus has faced from time to time, due to the way the Cypriot investment program is handled.
Committee chairwoman Eleni Mavrou and other members spoke of specific changes to the regulations that, as mentioned, serve a category of professionals, the big developers, excluding small manufacturers from taking on projects related to the program. The reports concern provision for the prohibition of setting up a company in the way of investment and participation in the program with Mr. Nouris noting that some “proceeded to set up a construction company, invested through it, reaped benefits through the sale and then made a profit” since it was beneficiaries of the program with benefits from the investment and VAT refund.
Ms. Mavrou also referred to the complexity of the arrangements and windows asking for the ministry’s answers before next Monday, so that the discussion can proceed quickly.
Reservations are raised regarding the possibility of investing in small and medium-sized enterprises’ funds, with MPs noting that the report is broad and that it is not clear which areas are being supported. In the context of his answers, Mr. Nouris said that the purpose is to have flexibility in which areas will be benefited.
Commenting on political issues, Mr. Nouris said the economy is based on tourism and construction as strong as possible and that “there we want to turn investors to strengthen this part”, while pointing out that “the construction sector is dragging unemployment issues”.
The chairwoman of the committee asked the relevant services to agree on the wording of the text before continuing the discussion, while requesting information from the relevant committee regarding the control procedure of the 29 naturalization cases and the reasons for the delay. At the same time, relevant proposals of the law are pending before the committee, for which, according to Mr. Nouris, the personal data commissioner should also be present at the discussion.
By Maria Hampi