14/02/22

CITIZENSHIP AND RESIDENCY: Bulgaria issued ‘golden passports’ to Russia’s top bankers.

​As published on euractiv.com, Monday 14 February, 2022.

Some of Russia’s top bankers received Bulgarian “golden passports”, despite no evidence of them making real investments in the EU’s poorest member state.

Bulgaria’s citizenship by investment scheme that grants citizenship and an EU passport to wealthy third-country nationals is under increased scrutiny locally and at an EU level over fears of money laundering and other financial crimes. In Malta- a state with a similar scheme- concerns have also been raised that criminals and those involved in embezzlement, fraud, and money laundering are being granted passports without proper checks and balances.

In Bulgaria, Russians who received the right to free movement throughout the EU from the Bulgarian state include Dmitry Kushaev – director of the Credit Suisse office in Moscow, Roman Nagaev – former director of investment banking at Russian bank VTB Capital, and Igor Finogenov, former director of the Eurasian Development Bank, reports the investigative website Bird.bg

One of the criteria to receive Bulgarian citizenship under the scheme is to invest in the economy through property, business, or bank deposits.

Kushaev, Nagaev and Finogenov do not own property in Bulgaria or own or manage companies. This means they have not invested in the real economy but have probably bought Bulgarian government securities, i.e. government debt. The other option provided by Bulgarian citizenship law is to make a cash deposit in a Bulgarian bank but an investigation found that many applicants were taking out loans to make the deposit.

Bulgaria’s new ruling coalition, which came to power in December, promises to end opportunities to get “golden passports” in the country in the next few weeks. A total of 97 foreigners hold Bulgarian “golden passports”, of which 40% are Russians, according to data from EURACTIV Bulgaria.

The possibility of acquiring Bulgarian citizenship in exchange for investments has existed since 2013 but has not led to any tangible investments. Such is the case with the three Russian bankers.

Igor Finogenov was chairman of the board of the Eurasian Development Bank from 2006 to 2015, having previously been an assistant to Russia’s finance minister and a banker at other banks, Bird.bg reports.

Finogenov received his Bulgarian passport and became a Bulgarian citizen on 4 June 2020. Dmitry Kushaev became CEO of Credit Suisse Moscow in 2016, and in 2021 was re-elected as a member of the board of directors of the bank. When he received his Bulgarian passport, he was an employee of the Swiss bank in Russia. Kushaev became a Bulgarian citizen on 12 March 2021.

Roman Nagaev is a graduate of Harvard University and a former director of investment banking at Russia’s VTB Capital Bank. After his career at VTB, Nagaev was appointed to the board of directors of PIK Group, a leading construction company in Russia in which VTB Capital Bank is a shareholder.

After Cyprus ended its cash-for-passports scheme in 2020 following widespread allegations of corruption involving government officials, Malta and Bulgaria remain the only two EU member states with such a programme in force. The European Commission has been clear that such schemes are unacceptable, yet the Maltese government has continued unabated.

Plans to shelve Bulgaria’s scheme have been on the table for several years, and it remains to be seen whether it becomes a reality.