Mikuláš Peksa: While Russia was threatening Europe with war in Ukraine, Russian oligarchs were buying EU passports in Bulgaria.

The whole world’s attention has been utterly consumed by the bloody conflict in Ukraine for several weeks now. Yet Russian threats followed by the invasion of Ukraine overshadowed events that simultaneously unfolded in nearby Bulgaria. Sofia has issued yet more golden passports to Russian oligarchs.

These passports are in high demand: every citizen of an EU member state becomes an EU citizen. European passports are also powerful – their owners can travel unrestricted not only around Europe but to most countries around the world.

This passport scheme is used almost exclusively by third-country oligarchs and mob bosses to gain entry into the European space. It will come as no surprise that this includes many rich Russian oligarchs. We have repeatedly seen that providing passports in exchange for money is not beneficial for the providing countries; on the contrary, it causes harm to all of Europe.

The three leading Russian bankers who got their golden passports from the Bulgarian authorities do not own any companies or immovable assets in Europe. This means that they were likely issued passports in exchange for transferring large sums of money directly to the Bulgarian government.

The issue of golden entry tickets has been plaguing Europe for many years now. Countries like Bulgaria, Malta, and until recently, also Cyprus have turned selling their citizenship into a lucrative source of profits.

European citizenship quick and “cheap”

Owning a Bulgarian passport has become more popular since 2013. That is the year the Bulgarian “golden passport” scheme entered into force. The price of one passport fluctuates between 800,000 and 2 million EUR, or 20 to 52 million crowns, which the applicant needs to invest in the local economy. They can do that by investing in companies or immovable assets or by creating jobs.

As we can see in the case of Russian bankers Dmitri Kushev, Roman Nagev, and Igor Finogenov, the scheme doesn’t actually channel any real funds into the country. None of the three really own any assets or companies in Bulgaria, meaning they either got their golden passports by buying Bulgarian state bonds or putting cash into a Bulgarian bank.  However, investigation shows that many applicants take out loans worth millions for such transfers.

In the last ten years, 97 people in total have gained access to Europe through Bulgaria – these include problematic oligarchs from former Soviet republics and corrupt Chinese officials. Roughly 40 % of them are Russian.

Another influential Russian with a Bulgarian golden passport is entrepreneur Roman Savushkin, closely connected to former Russian President Dmitri Medvedev. Savushkin became a citizen of Bulgaria when he was the Director-General of one of the world’s largest truck factories, UWC.He also gained his passport with the help of former MP Delyan Peevski, one of three Bulgarians who have been on the US sanction list as part of the Magnitsky Act since last year. Peevski has been using his underworld connections to control a number of Bulgarian politicians and officials.

However, it seems the European Union’s pressure on Bulgaria will finally result in a change. Only a year ago, the former government was vocally supporting golden passports, but the new one has recently promised they would abolish the entire scheme within a few weeks.

Thousands of golden passports for rich Russians

Apart from Bulgaria, it also used to be possible to buy EU citizenship in Cyprus. However, the Cypriot government decided to phase out the golden passport programme at the end of 2020 – after it turned out that Cyprus had been selling citizenship to politically controversial persons and granting asylum to global criminals.

Cypriot citizenship used to be much more popular than the Bulgarian one currently is, partly because of the island’s distance from the rest of Europe. In seven years, the little island state-issued golden passports to more than a thousand Russians, for example, with profits climbing to over 8 billion dollars. Applicants included billionaires such as the Russian Tinkoff Bank founder or a Chinese developer worth an estimated 617 billion crowns.

The Island of Corruption

If Bulgaria stops issuing golden passports, the last resort for rich oligarchs longing for a simple and cheap path to European citizenship in exchange for money will be Malta. The Mediterranean island is also involved in several other corruption schemes – for example, money laundering through carousel fraud. I wrote a bit more about these on my blog last summer.

The European Commission has brought proceedings against Malta for golden passports, but the Maltese government doesn’t seem willing to end its lucrative programme.

The Russian occupation of Londongrad

Seventeen more EU member states are offering golden visa schemes. These do not ensure instant citizenship, but they do grant permanent residency, which is a significant step on the road to citizenship. The most popular destinations used to include Greece, Portugal, and the United Kingdom. Since the program was launched in 2017, the Czech Republic has also received two golden visa applications.

London has a great deal of experience with Russian oligarchs – so much so that it has gained the nickname “Londongrad”. In the last seven years, the city has granted a golden visa to over 200 Russian oligarchs, rejecting only seven applications.

European citizenship is a right, not a commodity!

European citizenship cannot be treated as cheap goods for the global oligarchic elite and corrupt officials. Countries like Bulgaria and Malta cannot sell EU permits to Russian oligarchs connected to Putin and the Russian state.

Many EU countries have already stopped their golden programmes in reaction to the Russian invasion of Ukraine, which is commendable. But, unfortunately, it is not enough – Europe must cease selling golden passports for good!

The European Commission must make sure golden passport programmes disappear from Europe once and for all. Next week I and my colleagues in the European Parliament will be voting on a legislative proposal for the Commission regulating this issue. I hope this problem will finally start being taken seriously!