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The Cyprus Papers Analyzed : No Stone to be Left Unturned

The Civitas Post assesses the ‘Cyprus Papers’ in the geopolitical arena within which they are playing out. They explore the motives behind this leak (if any) and scrutinize how many of the ~100 cases listed merited to be listed. In the findings over half of these cases had no criminal records or sanctions against them.

With the Cyprus Investment Programme now under the world’s microscope there were fears that this ‘leak’ could lead to the programme’s demise.

The Cypriot government has confirmed that suspending/terminating the investment program would only work to confirm the damning reports, as published by Kathimerini.

Having attracted EUR 8 Billion in foreign funds, Cyprus is in a substantially better position to face the economic fallout of Covid19 than it was in the 2013 banking crisis. The Cyprus Investment Programme is a significant source of FDI, which needs to be effectively monitored and regulated to safeguard its very existence.

Accusations have been thrown about as to whether Al Jazeera’s report was a targeted attack on Cyprus, considering the UK, Portugal, Greece, Spain, Malta, Bulgaria etc… all have varying programmes for residency /citizenship which by default target the influential, the superrich and powerful (none of which it is illegal to be though). We explore the ~100 files that were flagged in the ‘Cyprus Papers’ and delve into how these were presented.

Just a few weeks ago, the Cypriot government passed laws that bolstered the programme further and also brought in important laws that streamlined the process of revocation for investors who are investigated and found (retrospectively) not to be eligible for Cypriot citizenship. Have all these legilsative changes though proved to be ‘too little too late’?

Simmering Tensions

Considering the complex geopolitical tensions in the region, it is not surprising that this ‘finger-pointing’ has occurred. Al Jazeera claims they are merely presenting their investigation’s findings and Cyprus is on the defense claiming this is a politically motivated campaign.

  • Firstly – Turkey has its own incredibly successful citizenship by investment programme which indirectly competes with other regional investment migration programmes for foreign investors’ attention. In fact, it is estimated by IMI that in just one day the Turkish Citizenship programme raises USD 17.3 million. The Turkish citizenship program predominantly draws in Iraqis, Iranians, Russians and Afghanis as per the latest reports who can obtain a Turkish passport if they invest from USD 250K + in real estate for three years.

  • Secondly – Apart from the long-standing political tension stemming from the Cyprus problem since 1974, Turkey is now in a geopolitical dispute with Greece (and Cyprus) over maritime territory (and rights to gas) in the Levantine basin. This tension has escalated to such a point that global superpowers including Russia and the US are now involved.

So how does any of this tension with Turkey have to do with Qatari owned Al Jazeera and the #CyprusPapers?

It is argued that the motivation behind Al Jazeera publishing the ‘Cyprus Papers’ with the ‘editorial tone’ that it has done – stems from the fact that the Qataris are long-time allies of Turkey. Both Sunnis, their collaboration extends to strategic military bases, aid during turbulent times of political tension with other nations and financial support. Substantial financial support infact, to a sum of US$ 15 Billion in a foreign currency swap, which has helped Turkey weather the storm as the Turkish Lira continues to devalue against the EUR, USD etc.

The Responsibility of the Press : A Delicate Balance

ll media channels have a responsibility to publish facts unbiasedly – ensuring the content and the messages implied are factual.

Undeniably though, Al Jazeera had a one-track mind when publishing the ‘Cyprus Papers’. To create enough noise, with the use of farcical videos and flashy headlines, to tarnish the Cypriot citizenship programme. This in turn wards off prospective investors concerned about the viability of the investment scheme and creates doubts in the minds of the wider public as to whether the Cyprus Investment Programme causes more harm than good.

Titles of some of the Al Jazeera articles published on the 'Cyprus Papers"

Cyprus’s dirty secrets
Cyprus sold passports to criminals and fugitives
‘Golden passports’ bring Russians into the EU
Cyprus sold passports to ‘politically exposed persons’

The Cyprus Paper articles that Al Jazeera published, all with click-bait-ish titles () garnered an incredible amount of attention from stakeholders globally a cast a long shadow over the reputation of the island state.

In Al Jazeera’s latest article issued on the 5th of September 2020 entitled Cyprus to strip seven people of ‘golden passports’” PEPS (Politically Exposed Persons) are referred to as un-convicted criminals or in their own words ‘they’re not proven criminals‘ ….implying they are criminals (!). It is quite likely Jacinda Ardern, applauded for her good governance, Justin Trudeau who enjoys global support for his policies, or the little-known hardworking Member of Parliament in the UK elected by his/her constituents, would all feel rather offended at being referred to as quasi-criminals simply because they hold political offices.

“There’s another group that’s keen to get passports to Cyprus, people linked to foreign governments or state owned companies, they are called Politically exposed Persons or PEPS – they’re not proven criminals but they are more likely to be cleaning money or hoovering up bribes than the rest of us say fraud investigators.”

Minute 7.22 onwards of AJIU video report –

Are PEPS a high-risk category. Certainly. This is agreed across most sectors of industry and government. The FATF, an independent inter-governmental body that promotes policies against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction, offers a more academic definition of what a PEP actually is – namely a person entrusted with prominent public functions such as a head of state, politician, military official etc (and in no way implies PEPs are criminals).

Whilst investigative journalism is of paramount importance in the fight against corruption – a balanced approach to journalism is quintessential.

Politically motivated or not – Does it even matter?

Whether Al Jazeera’s report on their findings was 100% accurate or not – we’ll delve into that shortly – or politically motivated – the fact is it has had an impact, a substantial impact.

On the one hand it highlighted inherent vulnerabilities in the CIP’s process especially in the previous years. And on the other spun a story that the Cyprus Investment Programme draws in thousands of fugitives and criminals – which is a far cry from reality. 

The main priority for all involved (governments, investors, regulators, industry players) is – to take immediate and decisive actions in response. Enhanced Due diligence should be the top priority for all governments and citizenship units that supervise these programmes, it is no longer a matter of crossing the Ts and dotting the Is when it comes to compliance – but a prerequisite to safeguard the investment migration industry’s citizenship and residency programmes in and beyond Europe.

Revocations in the Pipeline

Are these shiny new revocation laws being put to use?

President Anastasiades informed AFP on the 4th September 2020, that even prior to Al Jazeeras’ ‘Cyprus Papers’, about 30 Citizenship by Investment investors had been referred for investigation to a special committee in the government. Seven of these (belonging to 4 Case Files) have been deemed unfit for the Cyprus Citizenship Programme and will be submitted to the due revocation process. An additional dozen or so of these cases currently under investigation could also suffer the same fate, if they are found to be ineligible for Cypriot Citizenship retrospectively. The Cypriot government is now keen to do a full and comprehensive examination of all passports they have issued under this program to quash any doubts about its commitment to transparency.

“There must be a full and complete investigation, providing answers by the committee to be appointed by the attorney-general, we hope, so that no questions remain unanswered.”

Government Spokesman Kyriacos Kousios

Is this all as a result of Al Jazeera’s leak?

No, not entirely.

As of late 2019, Cyprus has been under increasing pressure from all angles, the EU, Transparency International (and various other NGOs), local political parties and the Cypriot electorate, to ‘clean up’ its act in regards to the Cyprus Investment Programme. Since it was published that almost 30 individuals with dubious or criminal history had been granted citizenship – including the notorious Jho Low a Malaysian fugitive involved in $1bn USD financial crime – Cyprus worked earnestly to revise its programme and enhance the laws governing it. As outlined by the Cypriot President, accepting that there were numerous vulnerabilities in the programme changes have been taking place.

“There were some deficiencies or loopholes in the programme. And that’s why we have adopted so many steps … to introduce more effective control mechanisms,”

President of Cyprus Nicos Anastasiades

Facts and Figures : What weight do they bear?

Whether PEPs should have been barred on moral, security or ethical grounds is one question – the fact remains that the majority of these approved investors did fall under the scope of the law as up until mid 2019 PEPs were NOT PROHIBITTED from applying or obtaining Cypriot Citizenship.

1. Listed Politically Exposed Persons

  • How many of the ~100 ‘Cyprus Papers’ PEPS had no criminal record reported by Al Jazeera? Twenty Six

  • How many of the ~100 ‘Cyprus Papers’ PEPS did have criminal records/investigations/sanctions as reported by Al Jazeera? Eight

Were these PEPS legally allowed to apply for the CIP at the time they were approved? Technically, YES prior to July 2019 they were.

2. Listed Politically Exposed Persons

What about the other 60+ cases of NON PEPs listed in the Cyprus Papers? How many had reported criminal ties, convictions, sanctions, investigations etc.? Thirty Five

We highlighted in Gold those who got convicted/summoned to a criminal investigation/sanctioned after they had been approved of the Cypriot Citizenship for ease of reference. These thirty five non PEP cases will likely all be under special scrutiny as the investigation into Cyprus Citizenship by Investment applicants begins.

3. Redacted Profiles

What about the other profiles listed in the Cyprus Papers? How many of them had NO reported criminal records/sanctions etc.? Twenty Eight

Of the remaining listed Al Jazeera cases 28 were Entrepreneurs and philanthropists and a few were under political persecution.

Some have been flagged by Al Jazeera with no other explanation than to state that they own shares in Cyprus companies. Considering Cyprus offers extensive company formation services to thousands of entrepreneurs globally, this is no surprise. Others have been flagged but no description is provided or crime bar being wealthy entrepreneurs.

Some were flagged for having influential ties such as a French Philanthropist who was flagged as he is a family member of royalty (to what degree one can’t decipher from the information provided). Similarly there were others flagged for nothing more than being successful entrepreneurs including a German businessman so wealthy he owns a Seychelles island, a UK family who successfully built a Dubai based tourism company, several hoteliers, telecom moguls and food and beverage business owners.

Whilst we may be a tad envious that German owns an island in Seychelles, we can’t quite understand why many of these cases merited being included in the ‘Cyprus Papers’ list.

Extracts from the Analysis report listing redacted profiles who had no reported convictions/sanctions/investigations are below. We’ve highlighted in Gold for ease of reference any deemed related to / directly PEPS.

What Lies Ahead

  • Will the EU demand that citizenship only be granted based on EU-wide guidelines moving forward, instead of each sovereign state deciding how it grants citizenship?

  • What implication would that have on other investment migration programmes in the EU?

  • Will the recent changes of the Cyprus Investment Programme appease the EU’s AML and KYC concerns or will additional amendments to the law be needed?

  • How many more citizenships will be revoked now, in light of the #cypruspapers?

These are all critical questions that will unfold over the coming weeks and months. What is true is that the Cyprus Investment Programme is at a break or make point – it reforms, reviews and revokes as needed or it closes its doors to foreign investors. We’ll be keeping you abreast of these key areas, as we monitor the ongoing and wider geopolitical arena within which this plays out.



New York Office
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