The European Parliament has urged EU member states to curb money-laundering in the bloc by ending programmes to sell visas and passports – a step the multibillion-dollar industry said would cause economic damage.
The recommendation is part of a hard-hitting report which also accused seven EU countries, including Ireland, of acting as tax havens: Luxembourg, Cyprus, Malta, Hungary, Belgium and the Netherlands.
The document is the result of a year’s work by the parliament’s committee on financial crime and tax evasion. The report has now been adopted by the whole assembly, boosting its political weight, though it remains non-binding.
Lawmakers said EU states should “phase out” as soon as possible all existing schemes to market citizenship and residency permits to wealthy foreigners. Currently 20 of the 28 EU states have programmes.
The economic advantages of these schemes “do not offset the serious security, money laundering and tax evasion risks they present”, the resolution said, echoing a European Commission report in January.
The industry’s trade association, the Investment Migration Council, said that ending the programmes would threaten vital investments in “peripheral economies”. MEPs upheld commission warnings on risks posed mostly by programmes run by Malta and Cyprus.
“A good first step to combat intra-EU money laundering would be to get rid of the so-called ‘golden visas’ which are a gateway for money laundering and organised crime,” said Markus Ferber, head of the conservative group in the parliament’s economic committee. MEPs also urged the creation of an EU-wide financial police to counter the laundering of proceeds from criminal activities, which they estimate at €110bn annually.
They called for stricter rules and supervision to counter money laundering in the face of the series of scandals which hit several banks, noting that the latest overhauls maintained several loopholes in the EU legal framework.
The report further urged the EU Commission to assess money-laundering risks posed by legal arrangements such as special purpose vehicles and non-charitable purpose trusts, especially in Britain and its crown dependencies and overseas territories.
More broadly, deputies called for tougher EU rules against tax evasion and tax avoidance, saying the bloc should counter these practices in foreign tax havens and also in the seven EU states that “facilitate aggressive tax planning”.