Turkish authorities have opened administrative proceedings to revoke the citizenship of 1,070 individuals who obtained Turkish nationality through fictitious real‑estate purchases, Justice Minister Akın Gürlek announced on Monday. The action is the second wave of an Istanbul‑centered investigation into sham sales under Turkey’s citizenship‑by‑investment (CBI) program.
Scope of the second wave
- Police examined transactions involving three developers – Gül İnşaat, Beyaz İnşaat and LİV İnşaat – covering 734 foreign buyers.
- 274 of those sales were classified as collusive, creating citizenship for 1,070 people when family members were included; 11 applications were still pending when the raid began.
- The value of the collusive transactions exceeds TL 3.5 billion (≈ US $72 million).
- Prosecutors have opened cases against 88 suspects. Precautionary measures now affect:
- 2,011 properties, a hotel, 86 vehicles, two yachts, and 42 bank accounts.
- 72 detentions and 30 companies placed under court‑appointed trustees.
Comparison with the first wave
The August 2023 sweep targeted low‑value properties sold by developer Babacan İnşaat, resulting in:
- 687 citizenships revoked (including family members).
- TL 2.5 billion (≈ US $52.6 million) of investment funds that never entered Turkey.
- Seizure of 1,045 properties, a hotel in Bodrum, 15 vehicles, a yacht, and 10 bank accounts; seven companies were handed to trustees.
On the same day, the Interior Ministry announced the cancellation or withdrawal of 6,134 citizenships program‑wide – 5,391 linked to 1,150 investors involved in collusive transactions and 743 tied to public‑order or national‑security concerns.
Total impact to date
- Prosecutor‑led actions: 1,757 individuals (1,070 from the second wave + 687 from the first).
- Ministry‑wide cancellations (as of early August 2023): 6,134 citizenships.
- Overlap between the two sets has not been disclosed.
Legal and security grounds for revocation
Not all revocations stem from fraudulent sales. Among the August figures, 263 principal applicants were flagged by police and the National Intelligence Organization (MİT) on public‑order or national‑security grounds after naturalization, without any allegation of investment fraud. These cases may arise from concerns raised by external regulators such as the Financial Action Task Force (FATF).
Practical advice for current and prospective investors
- Transparency: Applicants are urged to disclose full information to their legal counsel early, allowing potential refusal or revocation risks to be identified before filing.
- Due diligence: The Turkish government does not employ external third‑party due‑diligence providers. Some firms are now commissioning independent due‑diligence reports on behalf of clients and submitting them to authorities.
- Legal representation: Investors should retain independent Turkish counsel who represents only the investor, rather than relying on developers, sales intermediaries, or citizenship agents.
- Exit options: For investors whose citizenship is revoked on security grounds, Turkey reportedly allows them to exit the investment without financial loss, a provision considered more favorable than in many other CBI programs.
Recent reforms to the CBI program
- Investment thresholds: Launched in 2017 with a US $1 million real‑estate requirement; reduced to US $250,000 in September 2018; raised to US $400,000 in June 2022 (current threshold).
- Alternative qualifying investments: US $500,000 bank deposit, fixed‑capital investment, or fund subscription, each required to be held for a minimum of three years.
- Valuation controls: Since March 2024, all property appraisals are performed by a single state‑owned valuation company. From December 2024, the land registry generates the official investment‑value certificate electronically, eliminating paper documentation.
The crackdown targets manipulated transactions rather than the CBI scheme itself, and officials argue that stricter enforcement will enhance the program’s transparency and international credibility. Investors who complied with the revised valuation and documentation procedures are not expected to be affected by the current revocations.
Source article: www.imidaily.com
