Correction: Cyprus-Golden Passports story

NICOSIA, Cyprus (AP) — In a story Feb. 13 about Cyprus’ toughening eligibility rules for its lucrative scheme to grant passports to wealthy investors, The Associated Press erroneously reported Harris Georgiades’ title. He is finance minister, not foreign minister.

A corrected version of the story is below:

Cyprus: No ‘golden passport’ to people rejected before

Cyprus’ finance minister says no “golden passports” for applicants rejected by another EU country running similar scheme

NICOSIA, Cyprus (AP) — Cyprus has strengthened the eligibility rules for a lucrative “golden passport” program that grants the document to wealthy foreign investors, ruling out applicants who already were turned down by another European Union country with a similar policy, a government official said Wednesday.

The EU issued a report last month warning Cyprus and other countries to beef up background checks before awarding the passports because of concerns non-citizens were acquiring them to launder money and flout tax laws.

The EU report came after Cyprus came under criticism for running a “passports-for-cash” scheme, a charge that Cypriot officials strongly denied. Under the Cypriot program’s rules, investors must put at least minimum 2 million euros ($2.26 million) into real estate or a Cyprus-based business.

Finance Minister Harris Georgiades said that from now on, applicants seeking a passport from the Mediterranean island nation would be vetted by an international agency and required to have a visa permitting travel within the EU.

Georgiades said Cyprus has given passports to 1,864 foreign investors since 2013. The program accounted for 1.2 percent of Cyprus’ gross domestic product in the last three years.

The minister said although the program’s overall worth since its inception amounted to 6.6 billion euros ($7.46 billion), it didn’t necessarily mean all that money helped the economy grow.

Citing an example, he said an investor’s simple purchase of shares in a Cypriot company wouldn’t fuel economy growth unless that investment results in other economic activity like the sale of a building.

That’s why, in another change introduced by the government, successful applicants will be required to make extra payments to support affordable housing, and research and development programs that could boost economic growth more directly, the minister said.

The measures come on top of stricter rules Cyprus introduced last year, including capping the number of passports given out annually under the program to 700.