The era of Cyprus’s controversial investor citizenship scheme has been formally and legally closed after the House of Representatives approved final legislative amendments that permanently revoke the Council of Ministers’ authority to grant passports to investors and entrepreneurs. The move effectively eliminates the last legal provision related to the defunct Cyprus Investment Programme (CIP), which was terminated following a corruption scandal in November 2020.
Closing the CIP Loophole
The new law, passed on Thursday, is aimed squarely at satisfying the European Union and preventing any possible future revival of a citizenship-by-investment scheme, thereby settling an infringement procedure launched by the EU in 2020.
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Revoked Authority: The Cabinet can no longer exercise its discretionary power to grant Cypriot citizenship to investors, their spouses, or children. Any future economic citizenship initiative would now require a new primary law passed by Parliament.
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Reputational Damage: The original CIP granted citizenship to 7,329 individuals (investors and dependents) between 2007 and 2020. A 2021 inquiry into the scandal, known as the Nikolatos Report, found that more than half of the citizenships granted between 2007 and August 2020 were unlawful.
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Enforcement: To address past abuses, the law introduces a 60-day appeal deadline for individuals facing citizenship deprivation by the Independent Committee for the Examination of Citizenship Deprivation. It also requires the publication of the names of those stripped of citizenship in the Official Gazette.
Heated Debate Over Sovereignty and Accountability
The parliamentary vote triggered a fierce debate among political parties regarding the scheme’s legacy and the country’s sovereign right to grant citizenship.
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Criticism of EU Pressure: Opposition AKEL MP Aristos Damianou asserted that Cyprus was “shooting itself in the foot” by acting under EU pressure and warned that the reputational damage from the scheme was “irreparable.”
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Defense of Economic Need: DISY MP Nikos Sykas countered that the changes were a natural progression after the programme’s abolition, although he defended the scheme as having provided economic support during a financial crisis, while blaming failures on “bad practices.”
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Call for Accountability: Independent MP Alexandra Attalidou strongly condemned the scheme’s “rotten foundations,” arguing it enabled political profiteering and severely harmed Cyprus’ international standing.
Revised Honorary Naturalisation Rules
In a separate reform, the new legislation updates the criteria for honorary naturalisation. This power is retained, but the scope is now limited and specific, to be managed under specific statutory criteria:
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Eligibility: Citizenship can now be granted to children of Greek soldiers who died in 1974, as well as to prominent cultural figures who have made exceptional contributions to Cyprus.
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Authority: The Deputy Ministry of Culture is established as the competent recommending authority for cultural figures.
Source: Cyprus Property News