John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 267: To ask the Tánaiste and Minister for Justice, Equality and Law Reform the number of passports issued relative to the passports for investment scheme; the persons to whom these passports were issued; if his Department monitors the regulations of the scheme to ensure that the passport holders or investors have not breached them; if the terms of the investments made relative to the scheme have been complied with; if his Department monitors the investment to ensure continued compliance; if difficulty has emerged relative to the scheme or investment; if his Department has a role in resolving such issues where they relate to a breach in the guidelines; and if he will make a statement on the matter. [1212/07]

Michael McDowell (Dublin South East, Progressive Democrats)
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The introduction of a scheme of investment based naturalisation had been advocated by Ministers for Industry and Commerce throughout the 1980s but opposed by successive Ministers for Justice on policy grounds.

In April 1989, the then Minister for Justice decided to seek Government approval in relation to a particular proposal which involved a large number of individual citizenship applications. The Government decided that the applications should be approved and, furthermore, so should future applications from anybody who was prepared to invest in the State.

Around this time a Statement of Intent was made available to persons who enquired about naturalisation linked to investment. This Statement indicated that the Minister would accept as fulfilling the requirements of "Irish Associations" in section 16(a) of the Irish Nationality and Citizenship Act, 1956, and would waive the residence condition at section 15(c) of the Act, applications in respect of which:

(a) the applicant acquired a residence in the State, had been resident in the State for two years and had spent a reasonable amount of time here over the two years,

(b) the Minister was satisfied, on the advice of a Minister of the Government, that the applicant had established a manufacturing or international services or other acceptable wealth and job creating project here that was viable and involved a substantial investment by the applicant, and

(c) all other requirements of the Act had been complied with.

In the period 1989 to 1994, 66 investors (plus 39 spouses and children) were naturalised. The Report of the Review Group of the Investment based naturalisation scheme, which I published in August 2002, reports "that there was a significant number of cases in which the requirements of the Statement of Intent either were not adhered to or where evidence that they were adhered to is absent from the Department's files."

Arising out of a view that there should be a more formal and transparent approach to investment based naturalisation, new guidelines were introduced in 1994, which took the form of Terms of Reference of an Advisory Group to the Minister. The Group was to examine each application for naturalisation based on investment, with the assistance of evaluation/advice from relevant agencies where necessary and, in making their recommendations to the Minister, would 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 that 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.

If approved by the Minister, written assurances in respect of the various requirements of the terms of reference were obtained from the applicant prior to the issue of a certificate of naturalisation. 41 investors and 37 minor children of investors were naturalised since the introduction of the Terms of Reference. The Review Group reported that there appeared to be a greater degree of compliance with the Terms of Reference.

It has been the practice of successive Ministers for Justice not to publish details of individual naturalisation cases other than those which are required by law, that is, the publication in Iris Oifigiúil of the name and address of the applicant, the date naturalised and whether he or she was an adult or minor. Applicants linked to investments — and for that matter all applicants — have an expectation that there will be no additional form of publicity about their applications other than that which is prescribed by law.

I am on the record in this House some years ago in relation to the naturalisation in 1990 of eleven persons under the Scheme. Question No. 5 of 17 October 2002 sets out the background to this matter. I subsequently informed the House in response to Question No. 193 on 13 May 2003 that I had received legal advice to the effect that grounds did not then exist for the revocation at that time of the naturalisation certificates in question. The Deputy can be assured that if the circumstances of any particular case are brought to my attention, I will have no hesitation in using my statutory powers of revocation to the fullest extent possible.

The investment based naturalisation scheme was abolished in April 1998 and, as the Deputy will be aware, I introduced provisions in the Irish Nationality and Citizenship Act, 2004 to ensure that this scheme will not be re-instituted and to rule out any future such scheme.