Passport shopping: High-risk nations named

LONDON: The Paris-based Organisation for Economic Cooperation and Development (OECD) on Tuesday identified 21 countries and jurisdictions that posed a “high risk” to global cooperation on tax evasion by offering citizenship for a price. Several Indian citizens – including economic offender Mehul Choksi – have accessed investment schemes that lead to citizenship in such countries in recent years. OECD said such schemes pose a challenge to the Common Reporting Standard (CRS) developed in 2014, to which India is a signatory.

Countries and jurisdictions such as Antigua and Barbuda, St Kitts and Nevis, and Cyprus grant citizenship or residency rights, called “golden passports”, that can be used by foreign nationals to hide assets by escaping reporting under CRS.

The OECD analysed 100 CBI or RBI (citizenship/residence by investment) schemes across the world, including in the UK, and concluded that 21 posed high-risk to the integrity of CRS. It also published guidance to identify and prevent cases of CRS avoidance.

It said: “Potential high-risk CBI/RBI schemes are those that give access to a low personal tax rate on income from foreign financial assets and do not require an individual to spend a significant amount of time in the jurisdiction offering the scheme.” Such schemes, it said, are currently operated by Antigua and Barbuda, The Bahamas, Bahrain, Barbados, Colombia, Cyprus, Dominica, Grenada, Malaysia, Malta, Mauritius, Monaco, Montserrat, Panama, Qatar, St Kitts and Nevis, Saint Lucia, Seychelles, Turks and Cacos Islands, the United Arab Emirates and Vanuatu.

Citizenship of Malta, for example, enables a foreign investor visa-free travel across the EU and several other countries, besides extending opportunities to conceal assets under the CRS. “Identity cards, residence permits ... obtained through CBI/RBI schemes can be abused to misrepresent an individual’s jurisdiction(s) of tax residence and to endanger the operation of the CRS due diligence,” OECD said.