The abrupt abolition of Cyprus' selling of Golden Visa residency permits to rich foreigners after a series of revelations many went to people with suspect criminal backgrounds and fears of money laundering will cost the government a big chunk of its annual income.

And it has left in limbo five members of Forbes' billionaires list who paid at least $2.5 million to acquire visas that come with valued European Union passports, the magazine's report said.

The government of President Nicos Anastasiades, who had defended the program to the hilt even after continuing reports of misuse, finally pulled the plug after the news site Al Jazeera produced an undercover sting video showing top politicians offering to facilitate sale of a visa to someone who said he had a criminal record, although it was an operative posing.

But investors still have until Nov. 1, when it ends, to get a visa although the government promised it will vet applicants closely to rule out those ineligible, which hadn't been done before.

Since it began, the program had brought in some 7 billion euros ($8.21 billion) in critical cash for a country that almost collapsed early in 2013 after a crisis when banks were caught with huge losses over big holdings in Greek bonds devalued 74 percent and bad loans to Greek businesses.

Transparency International said the visas annually brought in about 1.45 billion euros ($1.7 billion) or up to 7.5 percent of the Gross Domestic Product of 21.28 billion euros ($24.96 billion) although it went mostly to Chinese, Russians and those with no heritage ties.

“Cyprus has reluctantly now been forced to admit that many of the names revealed by Al Jazeera point to a massive failure in basic background checks that would stop international criminals from obtaining visa-free travel and market access to Europe,” said Forbes.

Transparency International said 30 people with pending criminal charges or convictions, and 40 people they classify as “politically exposed persons” were revealed in the leak after the government insisted applications were scrutinized.

After a Reuters report earlier showed shortcomings, along with local media reports producing names – the government has kept identities secret and hasn't accounted for where the money's gone – more than two dozen holders saw their visas revoked.

More than 3,000 of the visas have been sold while Cypriots in the Diaspora have to wait for residency permits or dual citizenship unless they are rich. 

The scandal saw Parliament Speaker Demetris Syllouris, the second highest-ranking government official, resign as he said he broke no laws and that he was playing along in the video to get evidence for the country's anti-money laundering authority. 

Christakis Giovanis, a Member of Parliament shown in the video offering to help the applicant he thought was a criminal get a visa, also resigned but neither have been investigated nor prosecuted despite the taped evidence.

The European Commission is considering possible legal action against Cyprus over the matter, said Christian Wigand, a spokesman, without saying what it would be or if it would involve Anastasiades.

He said that European officials had “watched in disbelief” as the undercover investigation, produced by Al Jazeera seemed to show high-level Cypriot officials willing to trade European citizenship for financial gain, the New York Times said.

VALUES FOR SALE

“European values are not for sale,” said Wigand, repeating a statement made by the Commission’s president, Ursula von der Leyen, in her State of the Union address last month although similar schemes in other countries were also at risk for corruption, the EU admitted.

The passport program bars anyone with a criminal record from applying. But Syllouris and Giovanis were filmed saying that they would help obtain a passport for a wealthy Chinese businessman — who, they were told, fled China after being sentenced to seven years in prison on charges of bribery and money laundering.

“If there is a problem, we are not going to stop,” Syllouris said in the footage aired by Al Jazeera. “You will have full support from Cyprus.”

Another associate is shown in the video saying it was possible to use a fake name on the passport.

Attorney-General George Savvidis, said an investigation would have to determine whether any laws were broken because both Syllouris and Giovanis said they were essentially undercover trying to gather evidence against corruption.

Al Jazeera reporters posed as associates of the businessman, the newspaper said although some media outlets don't allow the practice which is a hot topic in the sector over whether it's ethical.

Vera Jourová, Vice-President for Values and Transparency in the EU Commission, said that the “EU passport is not for sale and fight against crime of any kind must never be underestimated.”

With Cyprus under increasing pressure to respond, “Axing the scheme was the only option,” says Maria Martini, policy expert on corrupt money flows at Transparency International said.

In late September, Al Jazeera published leaked documents revealing details on some of the 2,500 people who paid to become citizens of Cyprus between 2017-19, including more than 1,000 super-rich Russians as well as so-called PEPs (‘politically exposed persons’ – those who work with or for national governments with potential access to public money) and those convicted of crimes, largely financial, among those wanting Cypriot visas.

those seeking access to the EU through investment in Cyprus.

Forbes found that five billionaires, collectively worth more than $35 billion, applied to the program over the two-year span, according to the Al Jazeera documents. 

Yang Huiyan, a Chinese real estate heiress worth an estimated $29 billion applied. So did Oleg Tinkov, founder of Tinkoff Bank (worth an estimated $2.7 billion), Vadim Moshkovich ($2.1 billion), Zhang Keqiang ($1.6 billion) and Taha Mikati ($2.3 billion) also applied.

Former billionaires Oleg Bakhmatyuk and Alexei and Dmitry Ananyev were other applicants, according to the leaked documents.

Laure Brillaud, an anti-money laundering policy expert at Transparency International told Forbes to expect “passports canceled” where there is suspicion that the applicant was using the golden passport scheme to “launder money or evade justice.” 

Brillaud does not expect to see a “blanket revocation of passports previously awarded” but rather a case-by-case review of each application without saying how it would happen because Cyprus still won't reveal who got them.

“Several of the billionaires named in the Cyprus Papers are politically exposed persons in their home countries. They should not have qualified under the program since 2019, though it appears that this rule may have been routinely flouted,” she said.

There's a chance the program could be resurrected, The Times said, despite the risks and failure of the current scheme which still advertises prospective investors to act fast before it closes.

Maíra Martini, a research and policy expert at Transparency International, said told the paper a full analysis of passports awarded under the initiative was needed.

“The overwhelming evidence is that the country’s ‘Golden Visa’ scheme serves corrupt interests, not the people of Cyprus,” she said.