Wargaming and the Cyprus Passports – More Info

The Cypriot authorities found violations in the issuance of “golden passports” to Wargaming employees.

The 64 Wargaming employees who received Cyprus Golden Passports during 2014-2017 did not meet the investment program criteria. This was announced by the auditor general of Cyprus (Odysseas Mikhailides) in an official report.

The fact that Wargaming employees received “golden passports” in violation of the terms of the Cyprus investment scheme was reported on December 1 by the Cypriot edition of Stockwatch with a link to the interim report of the Audit service. The report was published by the Auditor General of Cyprus Odysseas Mikhailides on November 27: it does not mention the name of the Wargaming company, but mentions a certain “company A”, but Mikhailides informed the Ministry of Internal Affairs and the Attorney General of Cyprus which company is in question, says Stockwatch.

• The company with Belarusian roots Wargaming, which is the developer of the popular game World of Tanks and is headquartered in Nicosia, employs 400 people, it is the second largest shareholder of Hellenic Bank with a 20.6% share. In addition, Wargaming is one of the largest tax residents in Cyprus, which has invested tens of millions of euros in the republic, says Stockwatch.

The Office of the Auditor General, based on various information that he was able to obtain, identified 64 people who received Cypriot citizenship (naturalization) as being involved in “Company A”, the report says. “Company A” has been operating in Cyprus since 2011 and is engaged in international activities: it has chosen Cyprus as a place for investment and for the establishment of its headquarters, the document says. According to the auditor, out of 64 people, 30 received a Cyprus passport in 2014, 11 people – in 2015, 12 people – in 2016 and 11 more people in 2017 (until May). During this period, the Minister of Internal Affairs of Cyprus was Socrates Hasikos, the document says.

Of the 64 people, 27 worked in “company A”, the inspectors found out: among them there are three spouses of employees who also work in the company and may have received citizenship as dependents, the document says. “The remaining 37 people, apparently, did not work in ‘company A’, but received citizenship as related to it. These may be the heads of the company working abroad or even not related to it”, the report says.

Obtaining citizenship implies that the top manager must have such a remuneration in the company that allows Cyprus to receive € 100,000 in tax for at least three years, while the tax must have already been paid or paid in advance. In addition, the Golden Passport applicant must own a private property with a market value of at least € 500,000 plus VAT.

Due to government obstacles, the audit service was able to verify Wargaming employees only on these two criteria, the report says: at the same time, the service was not able to verify whether the holders of the “golden passports” had criminal records, the origin of the money invested in Cyprus, and whether those who received it paid € 2,000 for applying and € 5,000 for a certificate of citizenship.

As a result, the audit service came to the conclusion that none of the 64 audited persons met both criteria, and the fact that they received “golden passports” could be an abuse of power.

Among the violations, the auditors name cases when some holders of “golden passports” claimed that they lived on certain streets or in certain apartments, but the documents referred to land plots, parking lots or unfinished buildings, on which work has long ceased. This means that these people or lawyers on their behalf may have lied about their place of residence in order to obtain Cypriot citizenship, the inspectors say.

Of the 64 Wargaming employees audited, only seven own real estate. Two of them bought houses worth over € 500,000, another five bought houses below this price. However, these transactions took place after the company’s employees received citizenship, so even these two people should have been denied their application, the document says.

A Wargaming representative declined to comment.

Source: Forbes Russia.