Is It Time To Review The Caribbean Citizenship Program?
The news that all citizens of St. Kitts-Nevis wishing to travel to Canada will from now on require a visa, and that subsequently the St. Kitts government announced it would recall a number of passports, ought to cause pause for thought across the region about economically valuable, but reputationally risky, citizenship-by-investment schemes.
According to a notice issued by the Canadian High Commission in Barbados on November 22, Canada has taken this decision due to its ‘concerns about the issuance of passports’ and ‘the identity management practices’ undertaken by the St. Kitts authorities. It was doing so, it said, in order to ‘protect the safety and security of Canadians and the integrity of the Canadian immigration system.’
More explicitly, the Canadian High Commissioner, Richard Hanley, said the new requirement will prevent “those who are inadmissible or pose a risk to our country” from travelling to Canada.
In response, the St. Kitts government sought to downplay the decision. In a radio broadcast, the Foreign Affairs Minister, Patrice Nisbett, said: “Countries review and change their policies routinely in order to protect their interests and their people and so do we.
“Canada has important security concerns; the government recognizes this and the government of St. Kitts-Nevis will do all in its power to respect and accommodate the concerns of so important an ally.”
Since then, St. Kitts’s Prime Minister, Denzil Douglas, has announced a program of recalling and re-issuing certain passports.
In an earlier incident in May, also in relation to St. Kitts, the US Treasury issued an advisory notice expressing concern that Iranian nationals continued to obtain passports through the scheme’s ‘lax controls’ in order ‘to engage in illicit financial activity.’ At the time, David Cohen, the US Treasury’s Under Secretary for Terrorism and Financial Intelligence, told the Wall Street Journal: “These misleading identity documents heighten the risk that financial crime and sanctions evasion go undetected.”
Responding then, Mr. Douglas said that his government had set up a special advisory board to better monitor its program and that no new passports had been issued to Iranians in the past year, beyond some applications that had already been processed in the system.
Both developments reflect a growing concern in North America and Europe about who may be buying Caribbean passports under citizenship-by-investment programs and in particular the process by which their identity is checked.
There is of course nothing wrong with citizenship-by-investment schemes, a point accepted in North America and Europe where countries routinely operate their own programs. In their case, however, citizenship and a passport are only granted in return for a payment or investment of around US $1.5m, and only then after various checks, a sometimes lengthy period of residence, and the ability of the applicant to meet other requirements as a citizen. This is in contrast to some of the Caribbean schemes where passports are issued in return for a non-residential real estate investment of US$400,000 or a donation of US$250,000.
In the Caribbean, the revenue-raising potential of such schemes has become of particular interest to some of the region’s smaller heavily indebted nations. St Kitts, Antigua, Dominica and Grenada have such schemes and St. Lucia is considering the possibility. St. Vincent has ruled it out while some overseas territories have begun to explore their options.
Among those typically the most interested in citizenship programs are wealthy Chinese and Russian entrepreneurs, and citizens from the Middle East, the former Soviet Republics and Africa, unsettled by instability and who, for personal or political reasons, have an interest in holding alternative citizenship, or residing elsewhere.
But it is clear that being able to offer citizenship without a residency requirement is likely to come under increasing international scrutiny with
What effects will the sale of Caribbean citizenships
have on our economies in the long run.