ICYMI: Caribbean Investment for Citizenship programmes: David Jessop

Good overview of the trend among many Caribbean countries to offer citizenship for investors, and the risks and consequences of that approach:

Since then, most Caribbean citizenship programmes have put in place, usually with external support, mechanisms to address these issues, but there remain clear variations in the way programmes operate.

While officials in North America and Europe make clear they have no objection to well run citizenship-by-investment schemes given they have ones of their own, they say they remain concerned, suggesting the possibility of sanctions against any nation unable to ensure their programmes meet international requirements.

Notwithstanding, other conceptual and practical problems remain.

At a purely economic level, it is hard to understand why such schemes are not designed to be sustainable in ways that bring continuing income to the country concerned. Without any residency requirement there is no long-term gain in the form of other taxes or fees. Moreover, in the absence in some cases of the equivalent of an independently controlled sovereign fund able to receive fees from citizenship, one-off income remains unrelated to long-term infrastructural, education or public health care needs.

Secondly, the willingness of some countries to grant citizenship to future generations as well as the applicant means that not only is there no long-term benefit from the passport holder’s descendants, but the issuing nation concerned has little or no idea about the identity or nature of growing numbers of future citizens.

Thirdly, the real danger remains that should it be discovered that a passport has been issued to someone who is on a criminal or terrorism watch list, ordinary citizens may face blanket requirements for visas where none previously existed.

There are also other problems requiring resolution. There is a lack of clarity in some nations about what donations – the preferred route for most applicants – are applied to; there is a plethora of sales agents globally and a need for the regulation of their activities; some countries do not have the capacity to deal adequately with the number of requests being made; few governments join up their promotional efforts with developers to try to encourage investments into productive real estate or tourism projects; high risk investment vehicles are being approved; in some nations opposition parties allege impropriety in relation to who benefits; and most schemes still lack real transparency.

As international views on monitoring money laundering and transparency evolve, and concerns grow about global security, it is likely that countries offering economic citizenship without greater transparency could become the subject of more intense international scrutiny.

It would be wise for the region as a whole to consider carefully how best to balance the understandable desire to create new sources of government revenue, with the wider implications and reputational risk inherent in citizenship-by investment- programmes.

Source: Commentary: The View from Europe: Citizenship programmes – more work to be done | Caribbean News Now