NICOSIA, Feb. 2 (Xinhua) -- Cyprus is moving to change its rules for its investment for passports program after it was criticized by the European Commission as potentially dangerous for security and for possible promotion of money laundering, according to information obtained by Xinhua from reliable sources on Saturday.
The sources said on condition of anonymity that the Minister of Finance is expected to make a proposal on Wednesday to the Council of Ministers to change the criteria and the process for issuing passports to third country nationals.
European Commission vice-President Jyrki Katainen told Cypriot parliamentary committees on Monday that the Commission was concerned that Cyprus was not following a transparent process in issuing so called "golden passports" to foreign investors and that its checks on the origin of the applicant's wealth were insufficient.
Though President Nicos Anastasiades defended the passport program saying that the Commission was unjustly targeting Cyprus, the government moved quickly to make amends so as to avoid further criticism and to salvage its program.
The sources said that a key requirement for an applicant would be to obtain a Schengen Visa before making an application.
A Schengen Visa is issued by any of 21 EU countries, plus Iceland, Norway, Switzerland and Liechtenstein, which enables its holder to move freely in the Schengen Area.
Holding such a visa means that the applicant has been checked by all Schengen area countries and that none of them has rejected him before.
Cyprus is a signatory of the Schengen Agreement but its application has been put on hold because the Turkish occupation of part of the country is considered as a compromising factor for security.
Cyprus will further provide information to the European Commission on applicants for its scheme for naturalization of investors and would require that applicants stay in Cyprus for at least six months before applying for the program.
The Cypriot government spokesman has said that as an additional safeguard, Cyprus has applied for the hiring or specialized firms tasked with carrying out due-diligence forensics on passport applicants.
The amount required for investment is also expected to be increased from 2 million euros to 2.5 million euros, and can be invested not only in land development but also in any other existing or new business, and in government bonds, according to the sources.
They said that the Cypriot government hopes the changes to be introduced will be considered by the European Commission sufficient, so as to allow the continuation of its investment program.
The sources said that the government will also introduce a tougher code of conduct for scores of registered providers of naturalization services (lawyers, auditors, financial advisers, land developers and others), and make the violation of the code a penal offence.
Changes under consideration have already been discussed earlier this week at a meeting under President Anastasiades with the Ministers of Finance and Interior, the leaders of land developers associations and the Cyprus Investment Promotion Agency which runs the Invest Cyprus program.
The Ministry of Interior, which oversees the naturalization program is tight lipped on the number of third country nationals naturalized so far and their origin, and has refrained from commenting on both the EC criticism and on how it will act.
In another development, the Cypriot parliament passed by majority an opposition bill at a meeting overnight on Friday, requiring that with effect as of 2020, the rules for the naturalization program must have the approval of parliament.