World auditors voice concern at access to Cyprus cash-for-passport scheme records

A grouping of world auditors say they are concerned that the Cypriot government is limiting examiners’ access to records from an axed citizenship-for-investment scheme that critics said was open to abuse.

Cyprus scrapped the program in November last year after the Al Jazeera news network filmed a senior state official allegedly offering to facilitate a passport for a bogus investor with a criminal record. The official involved denied wrongdoing, but the government said the scheme was flawed and open to abuse.

Before that, authorities had defended the initiative, which was popular with Russians, Ukrainians, Chinese and Cambodians. Critics, which included opposition politicians and transparency campaigners, panned the scheme as opaque and fraught with criminal risk of money-laundering.

Cyprus’s audit office, an independent branch of the state, said in a September 2020 report it had been denied access by government ministries to the full records of the program from which close to 4,000 wealthy non-Europeans benefited from 2013 to 2020.

In a letter to Cypriot MP Irene Charalambides on Wednesday, INTOSAI, which is an umbrella for national audit institutions, said it “shared concerns” of the Cypriot audit office following limitations of its right to access.

Any limitation, it said, “undermines the SAI’s (Cyprus’s Supreme Audit Institution) ability to play its role in properly ensuring accountability,’ INTOSAI said in the letter to Charalambides.

The letter to the lawmaker, who is also a special representative on fighting corruption for the Organization for Security and Co-operation in Europe inter-governmental group, was published in the Cypriot daily newspaper Phileleftheros.

A spokesman for the Cypriot government could not be immediately reached for comment.

Over the past several months, government officials have repeatedly questioned the authority of the Cypriot audit office in carrying out the probe, accusing its head, Odysseas Michaelides, of overstepping his power.

“On the basis of this assessment, we expect the government will reconsider its stance and allow an unhindered audit of the Cyprus Investment Programme,” Michaelides said on Wednesday in response to the INTOSAI letter.

The government said late last year it would await the outcome of a separate inquiry commissioned by the island’s attorney-general and then take any action deemed necessary.

[Reuters]