Golden visa through POS; Myths and reality - Evangelos Pournaras, D.N, LL.M., Partner

One of the issues that came to the surface lately with regard to the Greek program of the Golden Visa concerns the mode of payment by the foreign investor of the property proceeds acquires. Several stakeholders foreigners (particularly non-EU citizens) alleged to have used either for the payment of a deposit / down payment (later included in the purchase price of the property), or to pay part of the price of the property market, credit or debit or prepaid card. But such a payment, even a part of the price, lawful under the Greek legislation; And if not, what consequences can have?

Let's start a little upside down, namely the possible consequences that may have.

1. Perfectly legal to market property by foreign (outside the EU) via POS

Critical in this case provision is that of Article 20 section B, paragraph. 1 of Law. 4251/2014, as amended and in force rticle 14 Paragraph 1 of N. 4332/2015 (Government Gazette 76/9.7.2015), according to:

"The minimum amount of real estate, and the contract price of leases hotel accommodation or tourist residences of this Article, fixed at hundred and fifty thousand (250.000) euro and must be fully paid upon signing the contract. The price paid by crossed check or bank deposit bank transfer to the beneficiary's account held with a bank in Greece or a credit institution under the supervision of the Bank of Greece, the specific details of which should be reported responsibly by the parties before the notary draws up the contract, and written on it '.

Based on the wording of that provision (whether it is legal to forecast discussed below) it looks, prima facie at least, that payment of even one Euro on the price with the use of other instruments or payment services, other than those listed (crossed bank check and bank transfer), like. credit, The prepaid debit card is insufficient. It is not enough for what; To acquire ownership of the property the alien or maybe just to establish entitlement to a residence permit?

The answer is simple and clear: That arrangement (article 20 section B, paragraph. 1 of Law. 4251/2014) not change anything in the conditions under which a foreigner may acquire ownership of a property in Greece. 'THE,So what was true before the enactment of that law still applies after. This law, puts, just the specific conditions which must be fulfilled if the foreigner wishes to acquire (beyond property and) residence permit in Greece or, simply put, the conditions under whichby a purchase contract serves as "title" of acquiring a residence permit in the country. So a foreigner lawfully acquires ownership of a property through POS.

2. Dual least "illegality" of the provision of article 20 section B, paragraph. 1 of Law. 4251/2014

The clarification of the second question no longer leads to more interesting, maybe, part of the problem of Greek Golden Visa Program, as recently highlighted in the news: If a foreigner paid the property seller even one Euro of the price using other means, transactions or payment services, other than those listed in N. 4251/2014 (crossed bank check and bank transfer), like. credit, The prepaid debit card etc., loses the right to apply for and obtain a residence permit in the country?

I personally believe that the duality introduced by Article 20 section B, paragraph. 1 of Law. 4251/2014 as to the manner of payment of the purchase price of a property by a foreigner as a "precondition" for obtaining a residence permit is not only dysexigitos, not to say absurd, in every, in any case, If not legitimate and acceptable as contrary to EU law provisions have increased power over the Greek laws. In detail:

At the outset one observes that the Greek legislature with the requirement crossed "bank" check or "bank" would transfer the price of the sale to "pass through" mandatory through Banks (and even specifically for transfer to necessarily result in the beneficiary's account that necessarily kept in Greek bank or a bank supervised by the Bank of Greece). First of all, causing concern the exclusion from the relevant banks proceeding from EU countries which are supervised by the central bank of another Member State (B.C. German, French etc.). Such a universal exclusion clearly contrary to European law. Antiparerchomenos, however, one that legal weakness and looking at a next stage of the reasons why the Greek legislature requires passing the price via Bank notes that the Explanatory Memorandum of Law. 4251/2014 there is no explanation. hence the requirement could, possibly, be explained on the grounds that banks have organized services and mechanisms that can control the origin of migrant capital and thus to prevent the trafficking of black money, but for reasons of preventing tax evasion or avoidance, money to be entered as the price in the contract and will be paid to the seller will coincide with what is alleged to have paid / send the buyer. such a, however, explanation, as plausible if displays, does not stop, finally, suffer multiple.. Particularly:

Leaving aside the outdated now (from technological developments) crossed bank check, which obviously can only be issued by Bank, one finds that "payment services", as is the "transfer", not provide in Greece now only the banks, as in the past, but other carriers bearing the same reliability and solvency and controlled in exactly the same way, as Banks. and talking, basically, electronic money institutions and payment institutions (here belong eg. It is known to all VIVA), list of which is published by the Bank of Greece, which complies with the relevant public register on its website, under the email address http://www.bankofgreece.gr/Pages/el/Supervision/SupervisedInstitutions/default.aspx

ndeed with Directive 2015/2366 / EU (Payment Services Directive II – PSD IItransposed into Greek law by Law 4537/2018 and has legal force, so superior legal force of Law. 4251/2014, specifically identified (article 4 ca.. 3 N. 4537/2018) payment services, which are, including, placements and cash withdrawals from a payment account and, as well as all the operations required for maintaining these accounts, execution remittances and the execution of payment transactions within the meaning of funds transfer between accounts, which takes the direct debit form, credit transfer or payment card or other similar device.

Simultaneously defined with exclusive Article 1 Fri.. 1 Directive 2015/2366 / EC and Article 1 Fri.. 2 N. 4537/2018 Providers of such Payment Services which consist of credit institutions, Payments to Institutions, the Institutions Electronic Money Issue, the post office, the European Central Bank and the national central banks, as well as the Greek government and the EU Member States, including their regional or local authorities, when not acting in their capacity as public authorities.

As already mentioned,, the establishment and operation of the three critical case payment service providers (credit Institutions, Payment institutions, Institutions issuing electronic money) require authorization from the Bank of Greece. Exactly the same is the case for payment institutions and electronic money institutions. As for payment institutions, N.. 4537/2018 pursuant to Directive 2015/2366 / EU -lays compulsory licensing by the Bank of Greece before the start of payment services in Greece. Referring to electronic money institutions, N.. 4021/2012 pursuant to Directive 2009/110 / EC refers to granting founding and operating license by the Bank of Greece.

From then once all three critical here Payment Service Providers (credit Institutions, Payment institutions, Institutions issuing electronic money) They provide their services in the same way, licensed and supervised by the same strict conditions by the Bank of Greece, the Greek legislature was required to provide a convincing explanation why exclude the provision of "transfer service", under Article 20 section B, paragraph. 1 of Law. 4251/2014, Payment Institutions and Foundations Electronic Money. What exactly are these Banks and missing here from these institutions; Not have such institutions like banks systems and control procedures of the origin of the money; Does the provision by the electronic way of payment / remittance service does not restrict, if not eliminate the risk of tax evasion, just like with the Credit Institutions; These questions are obviously rhetorical character. The,what it seeks to achieve the legislator excluding banknotes / banknotes as the price payment instrument and the process by requiring pass through "Bank", the same guarantees the payment process through electronic money institutions and payment institutions.

First Conclusion: The absolute exclusion Payment Institutions and Electronic Money from Greek legislator in Article 20 section B, paragraph. 1 of Law. 4251/2014 has absolutely no logic, not clearly contrary to Directives 2007/64 / EC and 2009/110 / EC. Above violates the fundamental freedoms of establishment, provide services and free movement of capital guaranteed by European law. Therefore the prohibition laid down in Article 20 section B, paragraph. 1 of Law. 4251/2014 is illegal and consequently Payment Institutions and Electronic Money Institutions can provide (at least) the "transfer" service under the payment of the property purchase price by alien wishing to obtain a residence permit in Greece.

The provision of Article 20 section B, paragraph. 1 of Law. 4251/2014 It is however problematic only in the part that allows the provision of "transfer service" exclusively to Banks, excluding wholly illegally and unjustifiably other legitimate Payment Service Providers. suffers, In my opinion, equally in the part that limits the ways of payment of the purchase price to the "crossed bank check" and "bank transfer", excluding the use of other payment services eg. by using debit, credit or prepaid card.This is because European law (Directive 2015/2366 / EC and Directive 2009/110 / EC) evaluate as equivalent, otherwise equivalent, undertakings set out all forms of media, transactions and payment services and electronic money (remittance, use credit, debit or prepaid card etc.). So reasonable question arises: Can the Greek legislature, no particular reason just because "so wants", exclude various, legally equivalent to that ultimately favors, payment services; Is there something that ensured eg. only the through "bank transfer" payment of the property purchase price and which, possibly, can not ensure the partially or wholly paid the price by debit, credit or prepaid card?

Only the fact that all payment services (remittance, use credit, debit, prepaid card etc.) It is the European equivalent legislation and generally accepted not prevent, self explanatory, the Greek legislator to adopt a flat prohibition, such as Article 20 section B, paragraph. 1 of Law. 4251/2014, which restricts the means and payment services accepted. However, the possibility of Greek lawmaker, like every national legislator in EU countries, It is not unlimited, but, instead, obeys certain rules more important that deriving from the principle of "prosforotitas" and "proportionality": Any prohibition / deviation from European law rules should be appropriate to achieve the intended purpose and in any case not more than necessary for attaining the objective pursued measure.

Approaching one horizontal prohibition of any payment service against the payment of the property purchase price by a foreign, except for the "transfer" and outdated "crossed bank check 'set out in Article 20 section B, paragraph. 1 of Law. 4251/2014, which restricts the means and payment services accepted. However, the possibility of Greek lawmaker, like every national legislator in EU countries, It is not unlimited, but, instead, obeys certain rules more important that deriving from the principle of "prosforotitas" and "proportionality": Any prohibition / deviation from European law rules should be appropriate to achieve the intended purpose and in any case not more than necessary for attaining the objective pursued measure.

Second Conclusion: The horizontal prohibition of any other instrument or any other payment service against payment of the price (use credit, debit or prepaid card etc.) except for the "transfer" and outdated "crossed bank check 'set out in Article 20 section B, paragraph. 1 of Law. 4251/2014 manifestly violates the principles of "prosforotitas" and "proportionality" should govern every kind imposed by the deviation European fair enough (Directive 2015/2366 / EC and Directive 2009/110 / EC). The size of the Greek "absurdity" is even greater, considering that the Greek legislature forbade (article 71 Fri.. 3 N. 4446/2016) until recently the use of any non onomastikopoiimenou electronic payment instrument, requiring as a condition of the legality of the use of the prior identification of the holder in the context of money laundering prevention. Each therefore of credit payment, debit or prepaid card in Greek territory was always "name", such that and remittance, but neither is "enough", as if the legislator N. 4251/2014 It was different from the legislature of N.4446 / 2016! Well, by any chance refusal of the Greek Administration to grant a residence permit to an alien who has paid even a single euro of the property purchase price eg. credit, The prepaid debit card, It is illegal and will be forfeited, sooner or later, the competent Greek and European courts.