The American citizen Eric Schmidt – also former Google CEO was one of the last-in through the door of the widely debated Cyprus Investment Programme – one of Europe’s most pricey citizenship by investment programmes – which came to an abrupt end on the 1st of November 2020. The news has stirred public outcry. Is Schmidt due to join President Elect’s team as well on his technology advisory board?
Who is Mr Schmidt?
| Born | Eric Emerson Schmidt April 27, 1955 (age 65) Falls Church, Virginia, U.S. |
|---|---|
| Education | Princeton University (BS) University of California, Berkeley (MS, PhD) |
| Occupation | Chairman |
| Years active | 1982–present |
| Employer | US Department of Defense |
| Net worth | US$14.2 billion (October 2019) |
| Title | Chairman |
| Political party | Democratic |
| Spouse(s) | Wendy Boyle (m. 1980) |
| Website | www.ericschmidt.com |
Eric Schmidt | photo from Techspot
- Schmidt’s most known role was as former CEO of Google from around 2001 to 2011.
- He though has held other notable roles such as being on the board of Apple in 2006 until 2009.
- He was a supporter of Clinton in her 2016 campaign through his shareholding in The Groundwork – which was heavily involved in Hilary’s presidential campaign.
- Schmidt also campaigned for Obama in 2008 and became one of the former President Obama’s transition advisory board members.
- During his time at Google, Schmidt was also involved in numerous contentious trips to Myanmar and N. Korea – he also served on Google’s government relations team.
- In 2016, Schmidt was appointed on the advisory board of the US Government’s Department of Defense – the Defense Innovation Advisory Board.
Does Schmidt then fall into the net of being classified a PEP?
As per the European Commission’s definition of a Politically Exposed Person this includes the individual and his/her spouse/child/dependent:
- Heads of States, heads of government, ministers and deputy or assistant ministers;
- Members of parliaments;
- Members of supreme courts, of constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances;
- Members of courts of auditors or of the boards of central banks;
- Ambassadors, chargés d’affaires and high-ranking officers in the armed forces;
- Members of the administrative, management or supervisory bodies of State-owned enterprises.
For the purposes of Article 3(8) of Directive 2005/60/EC, ‘persons known to be close associates’ of PEPs include the following:
(a) any natural person who is known to have joint beneficial ownership of legal entities or legal arrangements, or any other close business relations, with a person referred to above
(b) any natural person who has sole beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the benefit de facto of the person referred to in paragraph 1.
Yet, the revised Cyprus Investment Programme’s PEP definition broadly states that a person is ineligible to have applied if at the time of application the person is in/has been in a political position during the last twelve months prior.
Does Schmidt fall under an ineligible category under Cypriot law?
Seemingly No.
As the Cyprus government has granted him citizenship now – at a time when the eyes of the world are on the Cypriot government.
The whirlwind of negative press that stemmed from the Al Jazeera ‘Cyprus Papers’ and resulted in the subita morte of the Cyprus citizenship programme means there is little room for error now, much less would we expect, or hope, any ‘behind the curtain’ dealings.
Read More : Cyprus Papers Analyzed: No Stone Left Unturned
How does the Biden Election and Scmidt’s potential appointment as a key government tech adviser impact his status?
It is reported that Biden is considering Schmidt, a fundraiser and evangelist of the President Elect, to be appointed to head a task force focused on technology in Washington. Critics argue that these type of appointments (considering Schmidt is an Alphabet (Google) shareholder) further bolster the power of Big Tech in government and grant them even wider powers.
The reason PEPs are flagged in Citizenship by Investment programmes, as well as a myriad of other banking and financial programmes is not because they are criminals but merely because they are bestowed two critical tools – access to public funds and power/influence due to their high-ranking positions. If this new political appointment under the future President Biden takes place what implication will it have in terms of how Schmidt is classified and will it cast further shadow over Cyprus decision to grant Schmidt and his dependents Cypriot Citizenship?
What is the State of Play of Citizenship by Investment in Europe now?
Cyprus and Malta are under infringement procedures from the European Commission who consider that these Citizenship programmes which grant a passport to foreign investors who qualify do not require a genuine link to the Member State. They consider this to be “not compatible with the principle of sincere cooperation enshrined in Article 4(3) of the Treaty on European Union. This also undermines the integrity of the status of EU citizenship provided for in Article 20 of the Treaty on the Functioning of the European Union.”
The Cypriot and Maltese governments have two months until end of 2020 to respond to the European Commission and depending on how that progresses the will then take further steps with the European Court of Justice. The pressure though is mounting further with Bulgaria – who also offers an investment migration programme – now also under EC investigation.
Many members of the European governing bodies are staunch opponents of any form of golden visas in the EU – demonstrated by the Draft Resolution issued by the Council of Europe this summer calling for the phasing out of all such programmes. As noted earlier this year by Ms Sylwia Wolos of Refinitiv, a leading enhanced due diligence expert in the industry “The draft resolution, in a nutshell, calls for preventing any illegalities within the sector. This document still needs to be debated, possibly amended and eventually adopted by the Assembly towards the end of this year.”
“We are hopeful that the infringement procedures will be complemented by the urgent and necessary EU-wide reform. Heeding the calls from the European Parliament, the European Commission should present a plan for phasing out the golden visa schemes, as the next step.”
Laure Brillaud, Senior Anti-Money Laundering Policy Officer at Transparency International EU.
Therefore, it is important to note that this latest Cyprus passport is being issued to a renown figure like Mr. Schmidt – at a time when the investment migration industry is experiencing ambiguity and legal process and investigations.
#ericschmidt #cypruspassports #cypriotcitizenship #cyprusinvestmentprogramme #investmentmigration #goldenpassports #goldenvisas
References
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32006L0070
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1925
https://www.ft.com/content/44f738e8-eb6f-4394-b833-6b3207ce31bf
https://www.vox.com/recode/2020/11/9/21547055/eric-schmidt-google-citizen-cyprus-european-union
