Cyprus has tightened its procedures to allow foreign investors to acquire Cypriot citizenship, Finance Minister Harris Georgiades said after criticism that Cyprus was selling European passports.
Cyprus has tightened vetting procedures in a scheme that grants Cypriot citizenship to investors, asserted the Minister.
“We do not accept the claim that the Cypriot passport is up for sale. The Cyprus passport, like any state passport, is given on the basis of specific criteria,” Georgiades said.
Georgiades said Cypriot authorities have introduced more stringent controls on the program and capped at 700 the number of passports it will grant to wealthy foreigners each year, “less than 30% of the total Cypriot naturalization.”
“For example, in addition to the checks carried out to date, a thorough, exhaustive, due diligence check by specialized foreign firms will be carried out on a case-by-case basis,” indicated Georgiades.
In the past, the European Union strongly criticized the "Passport for Investment" program, which is also adopted by other countries such as Malta.
“The new system has made the process more rigorous and more reliable,” he said, adding the passport scheme was a “useful supplement” but that the island was not reliant on revenue from the investments.
Speaking at the meeting of the Association of Cyprus Banks, the minister admitted the system was not perfect, which is why it needed to be modified.
“The government recognizes that there may have been weaknesses, but it has shown a willingness to correct any weaknesses,” he said.
Georgiades stressed that the government will continue its efforts to establish a more credible banking system through a more efficient and equitable legislative framework by strengthening the institutions of the Central Bank of Cyprus and by ensuring the effective functioning of the courts.
The Minister declared that he expects the banking sector to meet the expectations and expects banks to operate in an efficient way, invest in technology and human resources, pursue violators and make the hard necessary decisions.
Meanwhile, Fitch Ratings upgraded Bank of Cyprus covering €650 million outstanding conditional pass-through (CPT) bonds raising its evaluation to BBB+ from BBB with a stable outlook and removed it from Rating Watch Positive.
According to a Fitch press release, the rating action reflects the upgrade of Cyprus’s Country Ceiling to 'BBB+', which is now the maximum achievable rating for BoC’s covered bonds, from 'BBB'.
Following the upgrade of the Country Ceiling, Fitch has updated certain assumptions for Cypriot residential mortgage assets to reflect the higher stress scenario in line with Fitch’s Structured Finance and Covered Bonds Country Risk Criteria.
Figures from the Statistical Service showed a trade deficit of €591.7 million in the first three months of this year due to an increase in island exports.
According to the monthly statistical bulletin, total exports/dispatches in January – March 2018 were €1.269 million compared to €601.0 million in January – March 2017. As a result of the above developments the trade deficit was €677,1 million in January – March 2018 compared to €1.268 million in the corresponding period of 2017.
Total imports, covering total imports from third countries and arrivals from EU countries, in January – March 2018 amounted to €1.946 million as compared to €1.869 million in January – March 2017
Imported goods were €721,2 million in March 2018 and €704,8 million in March 2017.
