W citizens a lifeline or a liability?
Spain and Malta, as and, Singapore and have similar, albeit schemes, some of ency. The relatively ean citizenship, pronal fairs and adveright magazines, sets om other countries. ges $100,000, and ch has the region's ogramme set up in y offered citizenship our for a $150,000 ane relief fund. gain citizenship, $350,000 stake in a Mount Cinnamon, or a national transforisland. lly, they're investing ping nation ... creatourism," said Mark development at de which owns Mount ants to expand the ies, citizenship programmes have proved a cash lifeline. At one stage, they made up about a quarter of Saint Kitts' income, allowing it to slash debt levels while financing the construction of luxury hotels.
Range Developments, which built a five-star hotel on Saint Kitts and is now working on a new resort, said citizenship-by-investment funds covered about 65 percent of the cost of putting up the Park Hyatt, which has employed hundreds of local people.
"These programmes are a major reason why we're looking at the Caribbean," Range director Mohammed Asaria told the Thomson Reuters Foundation by phone from Dubai. Given the vulnerability of the region to extreme weather such as hurricanes and economic shocks, the Caribbean Development Bank wants governments to funnel a chunk of the revenue into "rainy day" sovereign wealth funds.
"These revenue flows can tend to fluctuate, so countries really shouldn't become reliant on them for current expenditure," said Justin Ram, the bank's economics director.
LOOPHOLES
Brokers say applicants go through a rigorous three-stage process designed to weed out those on an international watch list, or looking to duck sanctions or launder money.
But others argue checks must be tighter to avoid scandals that could effectively slam the lid on the practice.
The U.S. State Department last year described Antigua's citizenship programme as "among the most lax in the world". In 2014, the U.S. Treasury Department warned banks that passports from Saint Kitts could be used for "illicit financial activity".
The Iranian chairman of a Maltese bank, now awaiting trial in the United States on charges linked to a $115-million sanctions evasion scheme, was identified by the U.S. Department of Justice as using a passport from Saint Kitts.
Separately, Canada slapped visa requirements on Saint Kitts' passport holders in 2014, after it said an Iranian entered the country on a diplomatic passport sold by the island state.
After that, Saint Kitts reprinted its passports to include the holder's place of birth.
"If any jurisdiction from a regional perspective is not doing the highest due diligence standards ... there tends to be a concern that the Caribbean region as a whole will be cast with the same brush," said Andrea St. Bernard, managing partner in Grenada for citizenship advisor Henley & Partners. Armand Arton, president of advisory firm Arton Capital, said Caribbean states should ramp up cooperation and transparency, and share information with U.S. and European law enforcement.
He said a database of "refusal shoppers" - who apply to different countries after a rejection - could help tighten up programmes in the Caribbean, which may soon face competition from new European entrants such as Moldova and Albania. Meanwhile, countries should avoid cutting prices in "a race to the bottom", and find new ways to entice investors to continue "to attract these much-needed investments", he added.