A SHIFT FOR ‘CI­TI­ZENS OF THE WORLD’ FROM EUROPE TO THE CARIBBEAN?

The Star (St. Lucia) - Business Week - - FRONT PAGE - BY ED KENNEDY, STAR BUSI­NESS­WEEK COR­RE­SPON­DENT

The Caribbean fi­nance sec­tor re­mains a lo­cal lifeblood, but one that is to­tally global in reach. The re­gion is recog­nised as an epi­cen­tre of off­shore bank­ing, for all the chal­lenges (and virtues in other in­stances) that can come with that. Yet though the off­shore bank­ing in­dus­try has long been a global con­cern, the grow­ing pres­sure from the EU on Cit­i­zen­ship by In­vest­ment Pro­grammes (CIPs) means there are signs the ‘party is com­ing to an end’ across the Euro­pean con­ti­nent. This has im­pli­ca­tions not just for Europe, but for the Caribbean, as high net worth in­di­vid­u­als AKA ‘ci­ti­zens of the world’ may look anew to this re­gion for buyable pass­ports and off­shore fi­nan­cial struc­tures.

THE RE­LA­TION­SHIP OF CIPS AND OFF­SHORE BANK­ING

Off­shore bank­ing and CIPs are sep­a­rate but re­lated is­sues within the Caribbean and beyond. While the in­dus­tries can ex­ist with­out one an­other, just as the lo­cal re­gion’s two big­gest in­dus­tries of tourism and fi­nance find many com­mon ties, so too do off­shore bank­ing and CIPs.

That’s why the news out of the Euro­pean Union on Tues­day of in­creas­ing pres­sure on the so called ‘Golden Pass­ports’ is­sued by EU na­tions is no­table not only for Euro­pean na­tions, but all around the world. Vera Jourova, the EU jus­tice com­mis­sioner, de­scribed ex­ist­ing CIPs in Europe as “prob­lem­atic” and “un­fair”, also cit­ing the se­cu­rity risks they pose as any­one who ac­quires cit­i­zen­ship from one na­tion in the Schen­gen Area can there­after travel through­out the EU.

This was also ac­com­pa­nied by the pub­li­ca­tion of the OECD’s anal­y­sis of

100+ ter­ri­to­ries that of­fer CIPs (and/ or res­i­dence by in­vest­ment) to for­eign res­i­dents. The re­port held that a num­ber of na­tions in Europe and the Caribbean, in­clud­ing An­tigua and Bar­buda, Bar­ba­dos, Do­minica, Gre­nada, Saint Kitts and Ne­vis, and Saint Lu­cia, po­ten­tially pose a high risk to the in­tegrity of the OECD/G20 Com­mon Re­port­ing Stan­dard (CRS).

The CRS, es­tab­lished in 2014, looks to fos­ter the au­to­matic ex­change of fi­nan­cial in­for­ma­tion be­tween dif­fer­ent ju­ris­dic­tions, and see this done an­nu­ally. In tan­dem with the pub­li­ca­tion of this list, the OECD has also pub­lished new guide­lines of­fer­ing direc­tions to fi­nan­cial in­sti­tu­tions, en­abling them to bet­ter iden­tify and pre­vent clients who seek to avoid the CRS.

WHY THE LAT­EST EU AND OECD NEWS MAT­TERS FOR THE CARIBBEAN

Though each na­tion pur­sues its own

CIP in­de­pen­dently, there are al­ways con­sid­er­a­tions beyond one state’s borders alone. For ex­am­ple, ci­ti­zens of CARICOM na­tions can travel be­tween lo­cal na­tions via a CARICOM pass­port, and cit­i­zen­ship — whether ob­tained by birth, a long nat­u­ral­i­sa­tion process, or a quicker CIP route — once granted, can­not (ex­cept in ex­treme cases) be re­voked.

The same dy­namic ap­plies to the EU. News of in­creas­ing pres­sure on its CIPs may cheer some lo­cals in the Caribbean who savour the prospect of an in­crease in busi­ness for the lo­cal CIP in­dus­try.

But it could also mean that those who EU in­tel­li­gence agen­cies have deemed a se­cu­rity risk, could look anew at a Caribbean CIP in the event that one from an EU na­tion proves too hard or too la­bo­ri­ous to ob­tain.

LO­CAL AND GLOBAL

The story of the Panama Pa­pers and Par­adise Pa­pers and their fall­out is ul­ti­mately one that is a global is­sue; just like the Trump phe­nom­e­non in Wash­ing­ton, Brexit and the grow­ing ten­sions within the South China Sea due to Bei­jing’s build­ing of ar­ti­fi­cial is­lands are global in im­pact.

Any ex­pec­ta­tion within the re­gion that it, and it alone, can ad­min­is­ter this de­bate or re­solve these is­sues lo­cally and to­tally by it­self would be wrong. Not only is the de­bate global in na­ture, but ul­ti­mately there re­main many ju­ris­dic­tions around the world that have seen con­tro­ver­sies arise sur­round­ing their bank­ing and fi­nance in­dus­tries.

That’s why any­one in Europe who does wish to see the odor­ous el­e­ments of off­shore bank­ing stamped out, needs to think care­fully about how re­form oc­curs; so that, in a global econ­omy, global re­sults are seen and not merely the ‘shut­ting up shop’ in one re­gion that may see a spread of the is­sues to an­other re­gion.

Just the same, if it’s ac­cepted that peo­ple and na­tions fur­ther afield have a right to call for change within the re­gion via in­ter­na­tional chan­nels, so too do Caribbean

na­tions have a right to re­spond, seek­ing to en­sure the con­ver­sa­tion truly is global; one that sees that any re­forms and change lo­cally are mir­rored else­where, whether the im­pe­tus for them is driven from lo­cals or from pe­ti­tions abroad.

In­deed, if it is ex­pected that the Caribbean de­liv­ers land­mark change where no other na­tions do, it re­in­forces per­cep­tions held by some lo­cals that this present de­bate is not just about global fi­nance, but also about old world na­tions seek­ing to stamp their au­thor­ity once more on new world states; new world na­tions who, in so many in­stances, re­tain painful mem­o­ries of coloni­sa­tion and for­eign dom­i­na­tion, and have no wish to re­visit them.

THE WINDS OF CHANGE GROW­ING

Re­cent weeks and months have shown a new mo­men­tum build­ing to ad­dress ex­ist­ing is­sues sur­round­ing off­shore bank­ing and il­le­gal tax prac­tices (clear eva­sion against law over min­imi­sa­tion alone), and also to com­bat crim­i­nal ac­tiv­ity that is tak­ing ad­van­tage of opaque bank­ing and buyable pass­ports. No fair cit­i­zen of a Caribbean na­tion or beyond could de­cry progress in these ar­eas that are pos­si­ble, prac­ti­cal and set to de­liver en­dur­ing re­sults.

It’s just also true that there re­mains within this de­bate a num­ber of reg­u­lar ci­ti­zens and lo­cal jobs that de­pend on the ex­ist­ing fi­nance in­dus­try. Just the same as their na­tions de­pend on their own to voice outcry when it’s per­ceived they are not be­ing treated fairly but are be­ing pushed by larger en­ti­ties.

Among these mem­bers of the Caribbean fam­ily many dif­fer­ent views can be found on the ex­ist­ing re­gional fi­nance in­dus­try, and how it op­er­ates from na­tion to na­tion, and as a whole. But all could agree on the shared de­sire to see a global push for change ac­com­pa­nied by global re­forms.

That’s why the re­cent news out of the EU will be watched with in­ter­est, not only for what it may mean for the Caribbean, but also be­cause it may lead to global di­a­logue that could see a truly in­ter­na­tional cam­paign for re­form find greater mo­men­tum than all that has oc­curred so far.

EU Jus­tice Com­mis­sioner Vera Jourova told Ger­man news­pa­per Die Welt that “the grant­ing of cit­i­zen­ship poses a se­ri­ous se­cu­rity risk be­cause it gives ben­e­fi­cia­ries all the rights of EU ci­ti­zens and al­lows them to move freely through­out the Union”. The Czech politi­cian con­tin­ued that the Com­mis­sion is “ex­tremely con­cerned” about the es­ca­la­tion of “golden pass­ports,” be­ing of­fered

Newspapers in English

Newspapers from Saint Lucia

© PressReader. All rights reserved.