On the 13th of October 2020, the Government of Cyprus officially announced the suspension of its Citizenship by Investment Programme, effective indefinitely from the 1st of November 2020.
It appears, though, that even months after the withdrawal of the Investment Programme, the strict scrutiny in the examination of the investors whose applications were pending, has created even bigger problems with the result that at present a large number of investors have had their applications rejected.
The scrutiny of the hundreds of applicants has created numerous negative issues, including the fact that, even though they have invested in Cyprus, with the purchase of either immovable property or other investment projects, and have complied with the necessary criteria to secure a passport in accordance with the regulations which applied to the old investment programme, their applications today have been rejected, without, in many cases, giving the investors a clear reason for the rejection of their application.
From a legal perspective, it seems that a huge legal issue may arise in case where an insufficiently legally based reason is provided for the rejection and more so in case where evidence thereof is not provided and such a decision is based solely on the authority’s powers.
The law dictates that decisions taken by authorities must be sufficiently and duly justified by specific and apparent evidence, so that it will not leave any doubt as to the real reasons which led to the issue of such decisions. The lack of proper justification is a very common reason for challenging the decisions of public authorities about the abuse of their discretionary powers. As an example, the investors have a legal right to challenge these decisions before critical requirements are placed before the Administrative Court.
The Administrative Court has the responsibility to examine each case separately and on its own merits and exercise its discretion in examining whether the public authorities’ decision was correct according to the facts that were applicable with each application.
Consequently, in the case where the criteria have been met, in our opinion, the applications should not have been rejected but should have been examined in light of the criteria that existed at that specific period regardless of whether the programme had been withdrawn.
There may have been deficiencies in the Programme, but that does not mean that the investors who had complied with the regulations and the criteria of the programme have to suffer the financial consequences of the rejection of their application and their naturalization.
The solution to the question of ‘How did the Authorities reach a negative decision?’ is to have such a negative decision examined, by submitting the relevant application and records to the Administrative Court, being the competent body for examining such applications. The deadline for submission is within 75 days from the date of the public authorities’ decision being brought to the attention of the applicant. If there is a failure to comply within the 75-day period, then the applicant completely loses his right to proceed with the application to the Administrative Court.
The steps that must be followed after submitting the application are quite simple. It is very important to provide the Administrative Court with the right reasons which, as I mentioned above, need to be clearly specified individually, based on the facts of each case.
If for instance, even though the investor has complied with all the requirements of the Investment Programme, but for example due to Covid-19, he could not renew his Schengen visa (because he could not travel to countries requiring a Schengen visa) but had effected his investments in Cyprus by complying with his investment commitments, we believe that it is a good reason to claim his rights in the Administrative Court.
The content of this article is valid as of the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Savvas Savvides, Partner at Michael Kyprianou & Co LLC, Paphos Office, Tel +357 26930800 or email email@example.com