Despite Antonio Costa, the Portuguese prime minister’s, announcement in early November that the country’s so-called golden visa programme might have fulfilled its purpose and could be scrapped, an initiative to put an end to it was blocked in parliament when the ruling Socialist Party voted against it.
While discussing the country’s 2023 budget, the Communist Party proposed to put an end to the golden visa programme.
However, Costa’s own Socialist Party, which has an outright majority, voted against it. Alongside them, the centre-right PSD and the far-right Chega also voted against the scrapping the programme.
When contacted, at first, a spokesperson from the parliamentary group said the vote had been a result of a negotiation between the government and the Communist Party, and they would not be able to politically justify their vote.
However, upon insistence, an official source said: “The government explicitly said that this issue would be assessed. And that assessment and analysis, after the (programme’s) last alteration, hasn’t been concluded. The Communist’s Party proposal was, therefore, out of time in relation to the fine analysis still to be done.”
Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic.
Unlike common practice in other European Union countries with similar programmes, Portugal has not implemented practices of “due diligence” and risk assessment of foreign citizens applying for golden visas.
A spokesperson for the SEF (Portugal’s Immigration Service) said: “the issue of the illicit origin of resources (…) goes beyond SEF’s scope of action and competence'”. Therefore, they add, these processes “are based in the assumption that an international transfer of capitals obeys current money-laundering legislation which has been transposed from EU directives.”
Ireland, for example, with a similar scheme, has implemented a series of processes which aim to do a risk assessment of applicants, namely in what concerns money-laundering, political exposure or being the subject of international sanctions.
According to data provided by SEF, Portugal has issued, since 2012, four golden visas to applicants from jurisdictions (Panama and Trinidad and Tobago) currently in the EU’s ‘red’ list of non-cooperative countries in terms of tax transparency and cooperation.
However, from the ‘orange’ list, made up of countries which do not fully cooperate with the EU in issues of tax transparency, Portugal has approved 1,466 golden visa applications in the last 10 years since the programme’s inception.
The “problematic” jurisdictions from which most of the requests came are Turkey (530), Russia (431), Vietnam (269) and Jordan (136).
Back in March, the European Commission issued a recommendation, denouncing these kind of programmes as being contrary to EU treaties.
The document says: “Member states should take measures to prevent investor residence schemes from operating in a way that could create risks linked to security, money laundering, tax evasion and corruption.”
The commission further specifies that “To this end, member states should ensure that all necessary measures and safeguards are taken to address the above-mentioned risks”
Transparency International Portugal (TIP) has long been a voice against the opacity in the ‘Golden Visa’ programme, demanding more transparency and due diligence.
Karina Carvalho, TIP’s executive director, said: “As has been pointed out in several reports, the Portuguese programme presents special vulnerabilities, and there never was, form Portuguese authorities, consistent action to rectify the identified shortcomings.”
Carvalho adds that, despite the Government’s announcement that the programme might be reviewed, it is still essential that a proper assessment of the programme is carried out in order to understand the exact risks Golden Visas pose to Portugal and the European Union.
Without this, she concludes, we won’t be able to understand the cost-benefit of such a programme in what concerns “money laundering, and terrorism financing” for example.
In 2018, NGOs Transparency International and Global Witness published a report about golden visas stating: “By their very nature, golden visa schemes are an attractive prospect for the criminal and the corrupt. The risk profile of applicants should demand the strictest of due diligence and the strongest measures to protect the integrity of the EU.”
In Portugal, Residence Permits for Investment Purposes (Golden Visas) may be granted for one of the following: €1.5m capital transfer (amount may be lower if invested in specific areas such as the arts or venture capital funds), creation of at least 10 jobs in the country, purchase of real estate worth at least €500,000 outside densely-populated areas.
Since 2012, when the scheme was implemented, Portugal has given more than 11,000 golden visas, one fourth of which to applicants from China, generating €6.5bn in investment and directly creating 280 jobs.