Written Answers. - Passports for Investment Scheme.
Jim O'Keeffe
Question:
39
Mr. J. O'Keeffe
asked the
Minister for Justice, Equality and Law Reform
his views on whether the report of the review of the investment based naturalisation scheme should be published; and if he will make a statement on the matter.
[15402/98]
Jim O'Keeffe
Question:
87
Mr. J. O'Keeffe
asked the
Minister for Justice, Equality and Law Reform
when he proposes to seek Government approval to publish the report of the review of the investment based naturalisation scheme as stated during a radio interview (details supplied).
[15401/98]
I propose to take Questions Nos. 39 and 87 together.
As I explained in responding to a number of questions from the Deputy in the past, the outcome of the review which I carried out was presented to Government in the form of an aide memoire. It is not the practice to publish formal ministerial submissions to Government.
I will, however, make the substances of what emerged from the review of the scheme, together with all the statistical and other information which was appended to theaide memoire, available for circulation with the Official Report. This information is essentially what was extracted from the case files during the review. I am not, however, in a position to release information which would either involve a breach of Cabinet confidentiality, disclose confidential legal advice from the Attorney General to this or previous Governments, potentially affect our international relations or, in accordance with long standing practice, breach the understanding of confidentiality with which individuals have dealt with my Department.
Summary
Review of Investment based Naturalisation Scheme 10 February 1998
The Scheme was intended to assist the then IDA in attracting inward investment especially in attracting manufacturing industry. The introduction of such a Scheme had been advocated by successive Ministers for Industry and Commerce throughout the 1980's but opposed by successive Ministers for Justice on policy grounds.
In April 1989, the then Minister decided to seek Government approval in relation to a particular proposal which involved a large number of applications. The Government decided that the applications should be approved and, furthermore, so should future applications for anybody who was prepared to invest in the State.
Around this time, a Statement in Intent (Appendix A) was made available to persons who enquired about naturalisation linked to investment.
Over the period 1988 to 1994, the range of investments made under the Scheme widened from industrial development (which appears to have been envisaged during the early days of the Scheme) to include, for example, some property and forestry development and the shipping sector. In this period, 66 investors (plus 39 spouses and children) were naturalised. By and large, the main elements of the Statement of Intent were complied with. Details are set out in tabular form at Appendix B.
The guidelines at Appendix C were introduced in 1994 and have been followed since. 29 investors (plus 9 spouses and children) have been naturalised since the introduction of these guidelines. In general, the provisions of the terms of reference have been complied with. Details are set out in tabular form at Appendix D.
Details of the various areas of industry are charted at Appendix E.
On 4 September 1996 the Goverment decided that no new applications should be accepted pending the introduction of specific legislation, while processing of existing applications could continue. On 11 March 1997 the Government decided that 19 cases on hand at 4 September 1996 were to be regarded as cases where commitments had been made while 50 other cases were to be left over until legislation was in place.
On 6 May 1997, despite the decision of 11th March, the Government decided that additional applications should be accepted in respect of 3 companies. Again, on 25 June 1997 the Government decided that a further application should be accepted in respect of a fourth company and approved the substitution of an application for investment in a particular company where the original investor had withdrawn.
On 2 September, 1997 the Government decided that further consideration of the Scheme should be deferred pending a report which would be submitted by the Minister.
On 14 October, the Government decided that the decision taken by the previous Government on 25 June to process an application should be implemented. The Minister approved the application and procedures were still being finalised on 10 February 1998.
The Minister indicated in reply to a Dáil Question that, pending the review which the Government (on 2 September, 1997) asked him to carry out, he would not be considering any of the cases which remained to be finalised.
There are a small (5) number of older cases which had been approved by Ministers prior to September 1996 which have still not been completed and may never be as the applicants no longer appear to be interested.
It is anticipated that applications will be received from the dependants of some investors who have themselves been naturalised. It is not possible to quantify the numbers of such applications but 8 such applications were on hand on 10 February 1998.
Overall, 143 persons (48 of whom are spouses and minor children of investors) have been naturalised on foot of this Scheme, with investment in excess of £90 million having been made. It is difficult to say precisely how many jobs have been created, preserved but the information available suggests that the figure is in the thousands.
Regulation of a scheme of this kind is very difficult for various reasons — checking character references for persons who have never lived in Ireland, checking whether the persons concerned have, in fact, honoured the undertaking to spend 60 days in Ireland in the two years after naturalisation, inability to take any effective action against persons who might not honour their commitments regarding residence.
Insofar as the Department of Justice, Equality and Law Reform could ascertain the following are countries which do give citizenship in return for investment or direct payments to Governments: St. Christopher and Nevis, Tonga, Belize and Panama. It is understood that in 1994 the Dominican Republic, Venezuala, Ecuador, Uruguay and the Bahamas operated similar arrangements.
The Minister is of the view that the Scheme, as constituted, should not be re-established. Failure to re-establish the Scheme would not affect the situation of any wealthy individuals who wish to live in Ireland, perhaps invest in business and apply for naturalisation under existing law.
Insofar as the applications accepted for processing by the previous Government in advance of the proposed legislation are concerned, the Minister is of the view that, in the light of the legitimate expectations of those involved and in the interests of those employed in the entities concerned, these applications should be processed to finality.
Finally, the Minister sought approval to announce the Government decision by way of a press statement and this was agreed. The Press statement which issued is at Appendix F.
APPENDIX A
Statement of Intent
(In relation to the exercise by the Minister for Justice of his discretion under section 16 of the Irish Nationality and Citizenship Act, 1956, as amended, to waive the provisions of section 15(c) of the Act in the case of persons establishing certain businesses in the State).
The Minister will accept as fulfilling the requirements of "Irish associations" in section 16(a) the guidelines set out in (a), (b) and (c) hereunder so as to grant an application which does not comply with the condition at 15(c) of the Act, but only that condition.
(a) The applicant will have acquired a residence in the State, will have been resident in the State for two years and will have spent a reasonable amount of time here over the two years.
(b) The Minister will be satisfied, on the advice of a Minister of the Government, that the applicant has established a manufacturing or international services or other acceptable wealth and job creating project here that is viable and involves a substantial investment by the applicant.
(c) All other requirements of the Act have been complied with. (Copies of sections 15 and 16 of the Act are attached).
Notes:
(1) "Residence" for the purpose of paragraph (a) involves the establishment here of a residence consistent with the circumstances of the applicant and any of his family allowed to reside here by law and in which he (they) have their home. The question as to whether any accommodation is or is not a "residence" will be decided on the criteria applicable to the grant of naturalisation generally and the decision of the Minister thereon shall be final.
(2) For the purposes of "a reasonable amount of time here over the two years" in (a) the minimum number of days acceptable would be 60.
(3) The "project" referred to at (b) will be one resulting from the applicant's investment and which would not otherwise have occurred.
(4) The application may include a spouse and children under 18 years of age.
Sections 15 and 16 of the Irish Nationality and Citizenship Act, 1956, as amended by the Irish Nationality and Citizens Act, 1986.
4. The following section is hereby substituted for section 15 of the Act of 1956:
"15-(1) Upon receipt of an application for a certificte of naturalisation, the Minister may, in his absolute discretion, grant the application, if satisfied that the applicant—
(a)is of full age;
(b) is of good character;
(c) has had a period of one year's continuous residence in the State immediately before the date of the application and, during the eight years immediately preceding that period has had a total residence in the State amounting to four years;
(d) intends in good faith to continue to reside in the State after naturalisation; and
(e) has made, either before a Justice of the District Court in open court or in such manner as the Minister, for special reasons, allows, a declaration in the prescribed manner, of fidelity to the nation and loyalty to the State.
(2) The conditions specified in paragraphs (a) to (e) of subsection (1) are referred to in this Act as conditions for naturalisation."
5.—The following section is hereby substituted for section 16 of the Act of 1956:
"16.—The Minister may, in his absolute discretion, grant an application for a certificate of naturalisation in the following cases, although the conditions for naturalisation (or any of them) are not complied with:
(a) where the applicant is of Irish descent or Irish associations;
(b) where the applicant is a parent or guardian acting on behalf of a minor of Irish descent or Irish associations;
(c) where the applicant is a naturalised Irish citizen acting on behalf of a minor child of the applicant;
(d) where the applicant is married to a naturalised Irish citizen;
(e) where the applicant is married to a person who is an Irish citizen (otherwise than by naturalisation);
(f) where the applicant is or has been resident abroad in the public service;
(g) where the applicant is a person who is a refugee within the meaning of the United Nations Convention relating to the Status of Refugees of the 28th day of July, 1951 and the Protocol Relating to the Status of Refugees of the 31st day of January, 1967, or is a Stateless person within the meaning of the United Nations Convention relating to the Status of Stateless Persons of the 28th day of September, 1954."
APPENDIX B
|
Yes
|
No
|
|
60 days residence in the State prior to application
|
10
|
56
|
|
Committment to reside in the State after naturalisation
|
17
|
49
|
|
Purchase of residence in the State
|
55
|
11
|
|
Evidence of good character
|
17
|
49
|
|
Declaration of loyalty and fidelity to the State
|
56
|
10
|
|
Was receipt of investment certified or confirmed
|
49
|
17
|
Terms of Reference of Advisory Group on Investment-Linked Naturalisation
1. To consider applications for naturalisation based on investment in the State received by the Minister for Justice and referred to the Group and to make recommendations to the Minister based on the Group's assessment of the jobcreating or job-maintenance capacity of the investment.
2. The Group will examine each application for naturalisation based on investment, with the assistance of evaluation/advice from relevant agencies where necessary and, in making their recommendations, will apply the following criteria:
(a) Substantial residence must be purchased and retained in ownership for a period of at least 5 years with an undertaking to reside in the State for a minimum of 60 days in the 2 years following naturalisation.
(b) The level of investment must involve a net contribution of at least £1 million per applicant.
(c) Where the investment is in the form of a loan it shall be for a duration of at least 7 years at an interest rate not greater than 1 per cent below the representative Government bond yield on the secondary market, or not greater than 1 per cent below DIBOR, whichever is lower. The loan shall be made by the applicant direct to the firm concerned, without involvement by any intermediary.
The loan arrangement shall be transparent and open to scrutiny and shall be such as to prevent the loan being factored or sold on. The loan shall not be secured by the assets of the company in which the investment is to be made.
(d) As ordinarily naturalisation would be for life, the duration of the investment should be for a significant period; at the very least 5 years.
(e) The number of jobs created or maintained must be readily quantifiable and arise from the investment only.
(f) Audited and certified confirmation of the investment to be available to the Group from an established auditing firm of accountants to the effect that the investment has taken place in accordance with the rules of the scheme for naturalisation.
(g) The investment will be monitored by Forfás to ensure that the conditions of the investment are being maintained and, in the event that they are not, will inform the Group who, in turn, will inform the Minister for Justice with a view to revocation of citizenship.
(h) Police certificate of character must be provided by authorities in country of origin (and, if required, from the Police in any country where the applicant has resided or carried on business or maintained substantial investments) together with express permission to the authorities in Ireland to enquire behind it.
(i) Annual certification by an established auditing firm of accountants to Forfás that the investment is being maintained for the appropriate period.
Department of Justice,
October, 1994.
APPENDIX D
|
Yes
|
No
|
|
Audited confirmation of investment of £1m.
|
29
|
–
|
|
Police certificate of character
|
27
|
2**
|
|
Purchase of residence in State
|
29
|
–
|
|
Committment to reside in the State for 60 days.
|
29
|
–
|
|
Declaration of loyalty and fidelity to State
|
29
|
–
|
**Applications were received in 1993, prior to the formulation of the guidelines.
APPENDIX E
|
£m.
|
|
Clothing/Fabric
|
11
|
|
Forestry/Timber
|
12
|
|
Shipping
|
9
|
|
Medical/Pharmaceutical
|
7
|
|
Energy
|
3
|
|
Food Products/Processing
|
10
|
|
Manufacturing Industry
|
15
|
|
Computers
|
3
|
|
Education
|
2
|
|
Property Development
|
8
|
|
Airport Development
|
3
|
|
Communications
|
1
|
|
Mining
|
3
|
|
Finance Sector
|
3
|
|
90
|
APPENDIX F
Press Release
Investment Based Naturalisation Scheme
The Minister for Justice, Equality and Law Reform, John O'Donoghue, T.D., today announced the formal ending of the Investment Based Naturalisation Scheme whose operation had been suspended since the Government took office.
The Minister said he would now proceed to process outstanding cases that were already on hands when he was appointed. These cases will be dealt with through the formal assessment process already in place since 1994 — which includes the involvement of an Inter-Departmental Advisory Group operating within set terms of reference.
The Minister wishes to stress that it has always been open to would-be investors to seek in the first instance Business Permission to reside in the State. Persons who have availed of such permission have always been in a position to apply, at a later stage, for Naturalisation under the relevant provisions of the Irish Nationality and Citizenship Acts.
The Minister indicated that the long-standing arrangements in place for the granting of Business Permission to individuals to reside in Ireland and subsequent Naturalisation applications by them will be reviewed. This review will be carried out by his Department in consultation with other Government Departments and relevant State Agencies.
Pending the outcome of this review the system currently in place in respect of Business Residency Permissions and subsequent Naturalisations willcontinue to be operated by his Department.
20 April 1998.
