#Citizenship for sale: fugitives, politicians and disgraced businesspeople buying Vanuatu passports

No surprises here:

A controversial “golden passports” scheme run by the Pacific nation of Vanuatu saw more than 2,000 people, including a slew of disgraced businesspeople and individuals sought by police in countries all over the world, purchase citizenship in 2020 – and with it visa-free access to the EU and UK, the Guardian can reveal.

Among those granted citizenship through the country’s development support program were a Syrian businessman with US sanctions against his businesses, a suspected North Korean politician, an Italian businessman accused of extorting the Vatican, a former member of a notorious Australian motorcycle gang, and South African brothers accused of a $3.6bn cryptocurrency heist.

The passport scheme allows foreign nationals to purchase citizenship for US$130,000 in a process that typically takes just over a month – all without ever setting foot in the country.

Marketed by agencies as one of the fastest, cheapest and most lax “golden passport” schemes anywhere in the world, the development support program grants unfettered, visa-free access to 130 countries including the UK and EU nations. Vanuatu also operates as a tax haven, with no income, corporate or wealth tax.

Experts have warned the scheme is ripe for exploitation, creating a back door for access to the EU and UK and allowing transnational criminal syndicates to establish a base in the Pacific, and Vanuatu’s taxation laws make the country an attractive site for money laundering.

A path to new identities

The passports program, which netted the Vanuatu government more than US$116m last year, has been highly controversial since its relaunch in 2017.

But until now, knowledge of who has bought passports through the scheme has been murky.

A series of internal government documents obtained by the Guardian via the country’s freedom of information scheme, details the name and nationality of every recipient of a Vanuatu passport through the country’s development support program and Vanuatu contribution program in 2020 and January 2021.

After a months-long investigation, involving searching publicly available court records, electoral rolls, death records, social media trails, and discussions with police and sources from around the world, the Guardian has been able to confirm the identities of dozens of the individuals on the list.

Vanuatu issued roughly 2,200 passports in 2020 through these programs – more than half (around 1,200) were to Chinese nationals. After Chinese, the most common nationality of recipients was Nigerian, Russian, Lebanese, Iranian, Libyan, Syrian and Afghan. Twenty people from the US, six Australians and a handful of people from Europe were also among those who applied.https://interactive.guim.co.uk/charts/embed/jul/2021-07-07T05:01:43/embed.html

The citizenship-by-investment (CBI) scheme is not illegal and many countries around the world offer CBI programs. There are many legitimate reasons for applying, including improved freedom of movement or tax-free offshore banking privileges.

However, security experts warn that the ease with which people can buy passports from the country, as well as the travel it permits, could make it an attractive scheme for members of transnational criminal syndicates, allowing them a legitimate base in the Pacific.

“It’s not just that they can travel through the EU or set up businesses … one of the issues is being able to create these networks to the Pacific, especially as the Pacific becomes more of a trafficking hub for drugs,” said Jose Sousa-Santos, a Pacific policy fellow at the Australian Pacific Security College. “And Vanuatu’s tax semi-haven laws make it very attractive for money laundering.”

The Guardian has found that a number of Vanuatu applicants are heavily implicated in a complex web of offshore business, with some owning shell companies with no discernible business activity.

Sousa-Santos added that another potential danger was people obtaining Vanuatu citizenship and then legally changing their name in Vanuatu, which effectively gave them a new identity.

“It’s one of the real risks,” he said. “If you are somebody who is a person of interest and who was able to somehow clear the Vanuatu Financial Intelligence Unit process, once you have Vanuatu citizenship, you’re able to change your name and, of course, be able to enter countries where your criminal background would not allow you to.”

In one brochure advertising the country’s development support program by a registered agent, the agency answers a question about whether passport recipients can change their name. “Once you are granted citizenship, you can change your name by sending us a letter that explains your motivation to change your name and your passport will be issued with your new name,” the brochure reads.

In response to these concerns, Ronald Warsal, the chairman of the Vanuatu Citizenship Office and Commission, said: “Vanuatu is a signatory to … most internationally sanctioned treaties and has ratified such treaties in recent years prohibiting transnational criminal syndicates to operate within its [jurisdiction] and as such, it is hard for international criminal syndicates to establish a base in Vanuatu.” He also said the country required checks before allowing a legal change of name.

EU concerns

Both the EU and the OECD have continued to express concerns regarding due diligence measures, forcing Vanuatu to promise it would step up background checks last year in an attempt to clean up the programs’ image. 

Despite this, the documents show that as recently as January 2021, Vanuatu was selling passports to individuals with links to fraud or sanctions and others who were sought by police in their home countrie

Other people granted passports by Vanuatu include:

  • Raees and Ameer Cajee, the founders of cryptocurrency investment platform Africrypt, who have been accused by lawyers for their former investors of a “crypto heist”, allegedly disappearing with bitcoin valued at roughly $3.6bn (£2.6bn), claims they deny.
  • Gianluigi Torzi, an Italian businessman accused of extorting Vatican officials of €15m (US$17.7m) during the purchase of a valuable London property. Torzi has denied wrongdoing.
  • Hayyam Garipoglu, a Turkish banking mogul imprisoned over a multimillion-dollar embezzlement scandal, and also sentenced to prison for harbouring his nephew after his nephew murdered a 17-year-old girl.
  • Ghali Belkecir, the controversial former head of Algeria’s Gendarmerie, the country’s military force in charge of law enforcement, who has four warrants out for his arrest.
  • Khaled al-Ahmad, a Syrian businessman and close advisor to President Assad, also obtained Vanuatu citizenship in June 2019, according to documents separately obtained by the Guardian.

In response to the Guardian’s inquiries about the individuals, Floyd Mera, the director of Vanuatu’s Financial Intelligence Unit, said: “Reading your list, most have allegations, pending investigations and ongoing court proceedings. A few have cases against them only after obtaining Vanuatu citizenship … If there are substantial convictions against any of these names, their citizenship may be revoked.”

He added: “Going forward, the FIU will conduct enhanced checks on the names provided in your list. If any of these persons have criminal convictions, FIU will promptly inform Citizenship Office of the updated information.”

The Guardian also believes there may be a senior North Korean politician and his wife who were granted citizenship after applying for the scheme using Chinese passports.

The names of a man and a woman who applied for passports last year match those of a well-known senior North Korean politician and his wife, though the Guardian has not been able to confirm the couple’s identity.

On paper, Vanuatu prevents citizens of Syria, Iraq, Iran, Yemen and North Korea from obtaining citizenship unless they can prove they have been a resident outside these countries for more than five years. However, the Guardian was able to identify a number of applicants from those countries who were resident within the black-listed countries at the time of applying.

A Syrian construction and real estate magnate with sanctions against a number of his businesses appears on the document. Abdul Rahman Khiti purchased Vanuatu citizenship just a few weeks after the US imposed sanctions on a number of his businesses.

Warsal, of Vanuatu’s Citizenship Office and Commission, said: “Abdul Rahman Khiti’s application was lodged prior to sanctions on a number of his business and by the time his application came before the screening committee and the FIU there was no adverse finding against him and the commission approved his application.”

Warsal said that Khiti also provided proof of his residency outside Syria for five years prior to applying. He added that the Citizenship Commission would be further investigating Khiti’s citizenship.

A source of revenue

Vanuatu is one of the poorest countries in the world, with the World Bank putting GDP per capita at US$2,780. The country is heavily in debt, in large part due to the natural disasters that have hit it. After a crippling cyclone in 2014, the country’s debt stock-to-GDP ratio climbed from 23% to 47% in 2018.

The sale of passports is the largest source of revenue for the Vanuatu government, with analysis by Investment Migration Insider finding it accounted for 42% of all government revenue in 2020.

In June 2021, the government reported a budget surplus despite the Covid-19 pandemic, largely thanks to the continued demand for citizenship, and the government has used the profits to pay down debts.

“There is merit [to the scheme],” said Ralph Regenvanu, the opposition leader of Vanuatu. “It just needs to be done a lot better than we’ve done it to date.”

Asked what advantage there is to Vanuatu, Regenvanu is blunt.

“Money. For a country with very limited resources, it’s money.”

Regenvanu said more robust processes needed to be implemented to screen applicants, in particular the enactment of an order that was issued by the former government – in which he was foreign minister – in March, which ordered an international specialist firm to be involved in due diligence checks.

“The only checks are the Financial Intelligence Unit and that’s obviously, as you found out, just totally inadequate … Our FIU obviously doesn’t have the capacity.”

Warsal said “the government is in its final stages to engage a European international reputable firm to assist the VFIU in its due diligence processes.”

But many in Vanuatu see the scheme as an affront to the sovereignty of the young country, which achieved independence from France and the UK in 1980 after almost a decade of struggle.

Ati George Sokomanu was a key figure in the country’s struggle for independence in the 1970s and was appointed as Vanuatu’s foundation president in 1980 after independence. He said the cash-for-passports scheme “tarnished” the vision of a free and proud Vanuatu they fought for during the independence movement.

“The gospel that we preached was to do with the return of the land from the hands of the foreigners – that we should have our own passport, that we would be a free people, we should have our own flag, and you know, be somebody in the face of this world,” he said.

“We struggled for our freedom and we gained it. And why should we break our sovereignty and our own dignity by making us become slaves again by selling our own passport to other people?”

Source: https://www.theguardian.com/world/2021/jul/15/citizenship-for-sale-fugitives-politicians-and-disgraced-businesspeople-buying-vanuatu-passports?CMP=Share_AndroidApp_Other

Related article: Want a new life in Vanuatu? Take the lift to the 23rd floor of a skyscraper in Hong Kong

If you wanted a new life on a tropical island and had US$130,000 to spare, you might end up visiting the 23rd floor of a nondescript building in downtown Hong Kong.

In the busy district of Wanchai, on a corner peppered with home decoration shops, car dealerships and small eateries full to the brim during lunch break, is the Tung Wai commercial building.

A bright entrance – now equipped with disinfection trappings and temperature-taking devices – leads to the fast lifts that will take you from the traffic din to what could be described as the Vanuatu floor.

Room 2303 hosts the Consulate General of the Republic of Vanuatu, with a large sticker on the glass door with Vanuatu’s coat of arms – a Melanesian warrior holding a long spear with one hand, standing against a mountain, with two crossed namale fern fronds and, behind the greenery, a curly boar’s tusk. Underneath it is Vanuatu’s national motto, Long God Yumi Stanap, which is Bislama (one of the three official languages of Vanuatu, together with English and French) for “In God we stand”.

Next to the consulate is the Vanuatu Trade Commission, which sits next to the office of Vanuatu Companies Limited, and the two offices of the PRG (Pacific Resource Group) Consulting Limited and PRG ImmiMart Limited.

The first company assists with investments and trade in Vanuatu, while PRG ImmiMart Limited has been appointed as the “Worldwide Exclusive Sole Master Marketing Agent to promote the Contribution Program” by the Vanuatu government via the company Vanuatu Glory Limited (VGK).

PRG handles all preliminary work for those who wish to purchase Vanuatu citizenship through the country’s Vanuatu Contribution Program (VCP), which costs $130,000 per person, or $180,000 for a family package.

Last year, more than 650 people were granted citizenship through the VCP. The huge majority were Chinese nationals, with just nine people applying for the scheme with nationalities other than Chinese.

The sale of passports is the largest source of revenue for the Vanuatu government, with analysis by Investment Migration Insider finding it accounted for 42% of all government revenue in 2020. The appeal of a Vanuatu passport includes that it offers visa-free travel to UK and EU countries and that Vanuatu – with no wealth, income or corporate taxes – operates as a tax haven.

PRG ImmiMart Limited is the sole agent in the world licensed to market this program, and according to one of the agents at the office, the company keeps $100,000 of the $180,000 fee for a family application, with the remaining $80,000 going to the Vanuatu government. They did not clarify what portion of the fee for an individual application went to the company.

The VCP is a separate scheme to the Development Support Program (DSP), which is managed by different agencies. The Guardian’s investigation into the identities of those who obtained citizenship of Vanuatu was focused on the DSP and not this scheme.

In the visitors’ office – an air-conditioned room with the flag of Vanuatu next to the Hong Kong SAR flag and a breath-taking view over Eastern Hong Kong island – Hin Ho, an agent, shows the brochures and the itemised table with the citizenship fees and charges, and explains how to apply for a Vanuatu passport and legally recognised citizenship.

The application process is straightforward, and shouldn’t take longer than eight weeks and does not require applicants to set foot in Vanuatu. It is such a well-established system that the brochure even specifies that the screening committee normally meets on the last Thursday of every month, while the citizenship committee meeting takes place on the last Friday of every month.

Money and no criminal record seem to be the main requirements for the “high quality new immigrants” scheme, with applicants required to provide a police clearance certificate, and asset proof of no less than $250,000 – excluding the amount that is being paid to the VCP to obtain citizenship.

Once approved, applicants can take an oath of allegiance in the building, after which they are handed a citizenship certificate and passport, and they can go down the fast lifts and exit into Gloucester Road having become a legally recognised citizen of the small Pacific Ocean archipelago.

Given the high cost, VCP may not be much help to the large numbers of people who want to leave Hong Kong for security reasons since the introduction of the National Security Law. But for wealthier passport chasers, keen for the peace of mind that may be granted by an alternative passport, the little green book of a Vanuatu passport might be just the ticket.

Source: https://www.theguardian.com/world/2021/jul/15/want-a-new-life-in-vanuatu-take-the-lift-to-the-23rd-floor-of-a-skyscraper-in-hong-kong

Citizenship by investment schemes – more than meets the eye?

Good overview of some of the abuses and corruption with these programs:

No longer solely related to family heritage or place of birth, citizenship has now become a tangible commodity. This is possible due to citizenship and residency by investment (CRBI) schemes. First introduced by the Caribbean island of St. Kitts and Nevis, CRBI offers citizenship or permanent residency to foreign nationals in exchange for cash investments. Dubbed “golden visas,” these investment opportunities grant foreigners legal status in these nations. For the fortunate few, they provide individuals with real estate opportunities and visa-free travel to different countries, writes Louis Auge.

Valued at approximately $25 billion (£20bn) per year in 2019, this industry is on the rise. With the ability to stimulate the local economy, many countries were quick to implement St. Kitts’ measures. From Portugal to St. Lucia to the United States, CRBI is possible in many jurisdictions across the world. However, the minimum capital requirement, timeframe for approval, and visa-free destinations provided per country vary drastically.

Based on these requirements, leading consulting companies in the CRBI industry have consolidated most of their businesses in the Caribbean. With five countries offering CRBI in this region, individuals are quick to invest due to the region’s experience with CRBI along with their secrecy laws. With an investment as low as $100,000 individuals can get citizenship in countries such as St. Lucia, Antigua and Barbuda, and Dominica.

Proponents have been quick to defend the benefits for both the investor and the host country, but the morality of these schemes are questionable. Locals in rural villages within CRBI countries have yet to see the effect of these investments. With a tolerance for corruption, there are stories across multiple jurisdictions of politicians taking a cut of each visa payment.

By placing a price tag on their citizenship, countries risk becoming a haven for criminals. CRBI schemes have been associated with hallmarks of criminality from tax evasion to money laundering. The taint of questionable activities does not stop with the clients of CRBI schemes either. Firms specializing in setting up and facilitating CRBI schemes have never been far from scandal.

The actions of CRBI consulting companies such as Henley and Partners and CS Global Partners have been questioned on multiple occasions. Recently, CS Global, established by a former senior figure at Henley and Partners, faced allegations of interfering in Dominica’s 2015 election campaign, making donations to PM Roosevelt Skerrit’s successful run for the leadership. Both sides deny the allegation.

The recent media surrounding Gurdip ‘Dev’ Bath is a case in point. As the former director of CS Global, Bath is well versed in the CRBI industry. Bath has established strong relations with government officials across the Caribbean. Indian by background and ordinarily resident in London, Bath holds a diplomatic passport from St. Kitts, in a capacity that remains unexplained.

Additionally, he has close ties with Hardip ‘Peter’ Virdee, a businessman from London who has been willing to pay bribesaccording to the United Kingdom’s National Crime Agency. These relationships have tarnished his reputation as a self-described ‘diplomat.’ Bath has also been seen and had high-level meetings with senior Indian officials including the Prime Minister. His current role  at CS Global, which specializes in CRBI in Dominica and St. Kitts, begs one to question his role in the company’s current Dominican scandal.

Unfortunately for Bath, his recent mentions across the media have taken a turn for the worse. Accused of planning and executing the recent kidnapping of Indian businessman Mehul Choksi, the scandal has the CRBI specialist caught up in alleged human rights violations.

Choksi was allegedly kidnapped from Antigua on 23 May 2021. Two days later, he was found in Dominica by local authorities. Arrested for illegally entering the country, Choksi currently awaits trial in Dominica.

Choksi and his lawyers point to evidence that he was kidnapped and taken to Dominica against his will. They have argued that Bath worked with the governments of Dominica as well as Antigua and Barbuda, possibly at the request of the Indian government, as part of a plan to bring Choksi to India, where he is wanted for charges of fraud.

In their report to the British police’s War Crimes Unit, Choksi’s defense additionally accused Bath’s associates Barbara Jarabik, Gurjit Singh Bhandal, and Gurmit Singh of being accomplices in Choksi’s kidnap and torture. Moreover, they note India’s apparent involvement, as a private charter jet containing documents regarding Choki’s extradition, was sent to Dominica from Dehli.

Bath’s case echoes that of Alireza Zibahalat Monfared, the ‘right hand’ of Iranian oil tycoon Babak Zanjani, convicted in 2016 of largest ever fraud to hit that country. After an international manhunt, Monfared was discovered and arrested in Dominica, where he too was living on a diplomatic passport. An Al-Jazeera investigation in 2019 showed how Caribbean nations offer ‘the protection or shield’ of diplomatic immunity to ‘international criminals’. The UK’s Geoffrey Robertson QC describes these programmes as an ‘international scandal’.

Henley and Partners, pioneers of CRBI schemes and closely associated with CS Global, suffered a reputational setback in 2021 when its email database was leaked to The Guardian newspaper. The leaks demonstrated how Henley helped clients to create a pretence that they were “resident” in the country for a full year by renting apartments and then leaving them empty. The company had previously come under fire in the Spectator magazine, which detailed Henley and Partners’ close links to Cambridge Analytica, as well as its involvement and potential interference in election campaigns in the Caribbean.

British MP Ben Bradshaw, speaking in Parliament in 2018, called on the UK government to support an investigation into the death of Maltese journalist Daphne Caruana Galizia. Bradshaw noted that the journalist, killed in a car bomb, was investigating Pilatus Bank, Cambridge Analytica and Henley and Partners at the time. Henley and Partners has strongly denied all of the allegations.

In response to these allegations, along with the discontent from Caribbean residents, one might question the future of CRBI. Will the industry clean up its image, dropping associations with secrecy and criminality, or will wealthier nations work to stamp out the practice? For nations like the US, UK and the Gulf states, these firms and their clients are associated with lower tax receipts, international fugitives and a constant drip of scandal. It may not be long before their patience runs out.

Source: Citizenship by investment schemes – more than meets the eye?

Probe: Cyprus wrongly issued passports despite warnings

No surprise. Like the vast majority of these programs, vulnerable to corruption, both in terms of those applying and administering:

The Cyprus government continued for at least four years to unlawfully issue passports to relatives of wealthy investors under an investment-for-citizenship program, despite warnings by the Attorney-General that this could be in breach of the law, the head of an independent commission said on Monday.

Former Supreme Court President Myron Nicolatos said that, of the 6,779 passports issued during the program’s 13-year run, 53% were issued not to the investors themselves but to family members or top company executives.

The Attorney-General’s Office had warned on separate occasions in 2015 and 2016 that the practice might be unlawful because there was no specific law enabling the government to issue such passports.

Of the remainder that were granted to investors, one-third failed to meet all the criteria, Nicolatos said. He was speaking after handing the final, 780-page report of an investigation into the multibillion-euro program to Attorney General George Savvides,

He said 8% didn’t meet the primary condition of investing around 2.5 million euros ($3 billion) into the Cypriot economy, while another 12% failed to meet the bar on owning a permanent residence in Cyprus.

Nicolatos said the four-member commission is recommending that authorities look into revoking citizenship in 85 cases in which the applicants may have committed criminal or other offenses to secure a passport.

He said that revoking the citizenship of investors’ relatives and company executives who weren’t directly at fault could prove “particularly complicated” because of legal clauses enshrined in Cypriot and European Union law.

“It’s obvious that the (program) operated between 2007 and Aug. 17, 2020, with blanks and omissions, without a legal framework and almost without a regulatory framework,” Nicolatos said.

“Also absent were those safety valves, the proper legal guidance as well as adequate supervision regarding existing laws and regulations.”

The program was scrapped last year amid much controversy over an undercover TV report that allegedly showed the parliamentary speaker and a powerful lawmaker claiming that they could skirt the rules to grant citizenships.

They had made the pledge to a reporter posing as a representative of a fictitious Chinese investor who had been convicted of fraud in his country. Both resigned shortly after the report was aired.

The golden passport program ran for 13 years but was ramped up in 2013 following the financial crisis. It generated more than 8 billion euros (almost $10 billion) for the east Mediterranean island nation and proved particularly attractive to foreign investors because obtaining an EU passport allowed them access to the 27-member bloc.

The EU had also taken Cyprus to task over the scheme.

Nicolatos also faulted some lawyers, accountants, banks, real estate brokers and developers who he said “didn’t sufficiently live up to their legal or other obligations” through the application process, while in some instances, supervisory authorities failed to do their job properly.

Politicians and officials may bear “political” responsibility for the debacle and some could face disciplinary action.

Although the program spanned the tenure of three different presidents, the overwhelming majority of citizenships were granted during seven years during which the sitting president, Nicos Anastasiades, held the office.

He called on law enforcement authorities to prosecute alleged law breakers and to mete out punishment to the degree of an individual’s responsibility.

Attorney General Savvides said authorities would examine revoking citizenships, take lawbreakers to court and take disciplinary action in those instances that the report recommends.

In the first such legal action, his office last month took five individuals and four legal entities to court to face 37 charges in connection with the commission’s findings.

A redacted version of the final report — so as not to compromise ongoing legal actions — will be made public in due course, Savvides said.

An interim report released in March also pointed to serious shortcomings in how the Interior Ministry processed applications, including the “complete lack” of a database to properly vet applicants. It said the Finance Ministry was also at fault for “green lighting” certain applications that didn’t fulfil all the criteria due to the size of the investment.

Source: Probe: Cyprus wrongly issued passports despite warnings

Are golden visas a golden opportunity? Assessing the economic origins and outcomes of residence by investment programmes in the EU

Good detailed study. Money quote: “our analysis suggests that wealthy investor migrants may be better conceptualised as mobile, profit-oriented populations akin to tourists and businesspeople, rather than as long term-oriented immigrants.” Conclusion below:

The twentieth century saw a remarkable shift from screening new immigrants based on racial origins to screening based on human capital contributions (Joppke 2005; FitzGerald and Cook-Martín 2014). The spread of RBI programmes in the twenty-first century adds a new dimension: screening new residents by economic capital contributions only. The results of this investigation suggest an upper limit on Ellerman’s (2019) finding that western countries now devalue the economic offerings of foreigners when selecting new members. In contrast to the policies aimed at workers that she examines, here we see that countries are indeed supplying pathways to long-term residence and citizenship for those making economic contributions – as long as they are very sizeable. Notably, the injections are one-off and the new residents are not expected to continue to contribute to economic growth in the same way that migrant workers might; they must simply maintain the original investment. The trend suggests a short-term calculation on the part of states, seeking to plug economic gaps, as our analysis finds, rather than a longer-term orientation of crafting a middle-class national identity (cf. Elrick and Winter 2018; Ellerman 2019). If social capital (Portes 1998), human capital (Stark, Helmenstein, and Fürnkranz-Prskawetz 1998; Ellerman 2019), and ethnic capital (Mateos and Durand 2012; Kim2018) have captured the attention of social scientists analysing migration, the developments tracked here suggest that a renewed focus on economic capital may be warranted. We find that states continue to harness mobility policies in service of economic objectives, now in a more starkly transactional manner, and – as we show – no matter what the political orientation of the government may be.

If RBI programmes are becoming an increasingly popular policy option, not all countries see the same uptake. Demand in Europe is concentrated in a handful of pro- grammes: just four countries represent 75 percent of all investor residents. The programmes now bring nearly €3.5 billion to the Union annually, yet the economic benefits are uneven. Indeed, only in two countries, Latvia and Portugal, are the economic injections large enough to represent a significant proportion of FDI. However in no country do they represent a substantial proportion of GDP, suggesting that concerns about macroeconomic destabilisation are unwarranted.

Our analysis reveals that economic decline leads to a greater likelihood that countries will start programmes, and that if the economic decline occurred during the Eurocrisis, the likelihood is yet greater – an argument proposed but not demonstrated by the literature (e.g. Parker 2017; Holleran 2019; Dzankic 2018; Veteto 2014). The choice of investment options, too, is largely responsive to economic need when governments implement real estate and business investment options, though not government bond options. Furthermore, the spread of programmes itself does not lead to more programmes: there is no contagion effect. As such, driving the onset of RBI programmes is more than mere client politics or neo-liberal ideology (cf. Mavelli 2018); economic need is a significant factor behind them. However, investors may stymie government intentions to use programmes to boost several areas of the economy, for they overwhelmingly invest in real estate if given the option.

Furthermore, our analysis suggests that wealthy investor migrants may be better conceptualised as mobile, profit-oriented populations akin to tourists and businesspeople, rather than as long term-oriented immigrants. The results lend support to qualitative work that identifies such mobile populations as ‘flexible citizens’ (Ong 1999), who use investment to multiply their options and secure additional bases, rather than to pack up and immigrate or invest in a growing economy (see also Ley 2010; Surak 2020a). We also find that countries with strong tourism sectors can charge more for their programmes as well. Yet they are not merely profit maximisers, choosing a price that will attract the most applicants; they respond to internal issues too, changing price in accordance with economic growth and employment rates.

A number of analysts have raised warning flags that investor migrants may price locals out of real estate (Scherrer and Thirion 2018; Holleran 2019). Our analysis shows the concern is unwarranted: the proportion of RBI real estate transactions in the national market is miniscule in nearly all cases. Notably, these programmes attract more distant and often ‘browner’ others than the fellow Europeans who constitute the greatest proportion of foreign real estate buyers and raise less media hype, suggesting that xenophobia may lie behind the concern. Greece is the sole, but significant, exception where the scale of the programme could indeed destabilise the property market. As real estate investment tends to be concentrated in specific locales (Friedland and Calderon 2017; Viesturs, Pukite, and Nikuradze 2017), regional and city-level data are necessary to further identify whether more limited destabilisation is occurring in particular areas.

What has been the impact of Covid-19 on these programmes? The sudden hardening of borders across the world has sent many wealthy people looking for ways to hedge their risks by securing mobility options and a Plan B (Surak 2020b, 2020c). To date, as we show, national-level healthcare statistics have been insignificant, but Covid-19 may encourage wealthy investors to select countries that have handled the pandemic well or that offer state-of-the-art healthcare. Covid-19 may also bring a shift away from a short-term ‘tourist-like’ calculation to a medium-term calculation preferring a place for longer-stint stays.

Regarding supply, Covid-19 is likely to increase the attractiveness of RBI programmes as a way to draw in foreign investment. Our study found that countries are more prone to start programmes after a period of slowed economic growth, particularly after a systemic recession. If the economic downturn spurred by the pandemic continues, it is likely that new countries will start their own programmes, replicating the pattern we found, and that countries with RBI offerings already in place will attempt to develop them further to address deepening economic need. Even if the schemes to date have been small, they still offer a means to attract additional resources at little cost. With real estate the most popular qualifying option, the investment boost is likely to be concentrated in the property and construction sector, which itself is transforming as the pandemic reconfigures work patterns and the desirability of urban living. Even if the European Commission continues to call for ending the programmes, countries are more likely to adapt their RBI offerings – perhaps by shifting them closer to, or even transforming them into, entrepreneurial options – rather than do away with them entirely.

Source: https://www.tandfonline.com/doi/full/10.1080/1369183X.2021.1915755

Covid accelerates India’s millionaire exodus

Of note:

India’s wealthy have topped a list of people seeking to relocate abroad through visa programmes that offer citizenship or right of residence in other countries in return for investments.

There was very little Rahul (name changed) didn’t have going for him, when he made the tough call to leave India six years ago. He is the second generation scion of a well-heeled Delhi-based family. They have a flourishing exports business with a monopoly in what’s typically called a ‘sunrise sector’- an industry that has great future prospects.

But he left it all behind and moved to Dubai in 2015, to look after the company’s overseas expansion. He also got a citizenship by investment in one of the Caribbean nations. Harassment by tax authorities in India’s Enforcement Directorate was a key reason, he says.

“I could see it becoming a problem for someone who had businesses spread across the world,” he told the BBC. “With a foreign passport, the red-tape has reduced substantially. I am less worried about being slapped with a random tax demand.”

‘Tax terror’ has been a routine gripe among Indian corporate tycoons. When the founder and owner of India’s largest coffee chain, Cafe Coffee Day died in 2019, he accused a former director general of the income tax department of harassing him. But the government has continued to tighten its noose around business owners in recent years.

According to one report, tax searches by India’s income tax department have more than trebled in the last few years.

The government has argued this is being done to eradicate “black money – illegal cash, hidden from the tax authorities – and improve tax compliance. But critics say the overreach is also often on account of pressure on bureaucrats to meet revenue targets.

But hounding by the taxman was just one reason for his move, says Rahul. His decision was also prompted by a growing trend of “divide and rule politics” in India, he told us. He didn’t want his kids to grow up in India’s increasingly polarised environment.

Many others in his circle of wealthy friends were also renouncing their citizenship or resident status, he added.

These claims are borne out by figures from the wall-street investment bank Morgan Stanley. A 2018 bank report found that 23,000 Indian millionaires had left the country since 2014.

More recently, a Global Wealth Migration Review report revealed that nearly 5,000 millionaires, or 2% of the total number of high net-worth individuals in India left the country in 2020 alone. And Indians topped a list compiled by the London-headquartered global citizenship and residence advisory Henley & Partners (H&P), of those seeking citizenship or residency in other countries in return for monetary investments.

Covid-19 has been a big driver of what was an ongoing trend of wealthy Indians seeking to “globalise their lives and assets” according to H&P. So much so that the firm set up its office in India in the middle of the lockdown last year to cater to growing demand.

“I think they [clients] are realising they don’t want to wait for the second or third wave of the pandemic. They want to have their papers now that they are sitting at home. We refer to this as the insurance policy or Plan B,” Dominic Volek, Group Head of Private at Henley & Partners told the BBC on a video call from Dubai.

According to Mr Volek, the pandemic could be a game changer, because it is making the wealthy think about migration in a more holistic fashion. It is no longer just about visa-free travel, or ease of access to global markets, but about wealth diversification, better healthcare and education, to protect against the uncertainties brought about by the pandemic.

Countries like Portugal, which runs a ‘golden visa’ programme as well as countries like Malta and Cyprus are preferred destinations for India’s well heeled, according to H&P.

This exodus of big money is not necessarily permanent in nature – people merely invest money in another country as a fall-back option rather than take out all their money from their home country and cut business ties. But it doesn’t bode well for a developing nation like India, say experts.

“When this happens, they remove themselves, their entrepreneurial ability and their income and wealth from the tax base. This is likely to be detrimental in the long run. Their exit sends a poor signal about the ‘doing business climate’ in India,” says Rupa Subramanya, Distinguished Fellow at the Asia Pacific Foundation of Canada.

Andrew Amoils, Head of Research at New World Wealth, a Johannesburg-based wealth intelligence group, told the Business Standard newspaper: “It can be a sign of bad things to come as high-net-worth individuals are often the first people to leave – they have the means to leave unlike middle-class citizens.”

Source: Covid accelerates India’s millionaire exodus

@ASemotiuk: How To Fund Biden’s Infrastructure Plan Using Immigration

Benefits of investor immigration and citizenship-by-investment schemes over stated along with risks of corruption. Great benefits for immigration lawyers and consultants, however:

Recently, President Biden unveiled a $ 2 trillion infrastructure plan to fix roads and bridges, while boosting research and tackling climate change. Calling it a “once-in-a-generation investment in America,” he introduced the plan to address the inequalities exposed by the pandemic and to heal America’s economy from the bottom up. More recently, Biden specified how he would raise the money through higher corporate taxation. But could there be a better more creative way?

How Much Is That?

If you are anything like me, you’re not entirely sure just how many zeros there are in a trillion. I had to look it up, and it’s 12 zeros. In other words, President Biden’s infrastructure proposal would cost exactly $ 2,300,000,000,000. It has been estimated that $1 trillion worth of one dollar bills stacked one on top of the other would measure 109,220 kilometres. Put another way, if you stacked up all the dollars in President Biden’s plan one on top of another, they would reach half way to the moon. That’s a lot of money. While Biden has set out his corporate tax proposal as a way to fund it, he has indicated he is open to suggestions on this theme.

Raising Taxes Has Been Proposed

It seems to me there are basically three ways America could pay for President Biden’s plan. The first way is to raise taxes. Biden argues that for those taxpayers making less than $ 400,000 per year there would be no tax increase. Instead he has proposed to raise taxes on large corporations and high net worth individuals. It is clear that Republicans want none of that and will fight tooth and nail to oppose the plan. Let’s face it, rich people and big corporations just don’t want to pay for this proposed program. With the Democratic majority in both Houses, Biden may be able to shove the plan down their throats. Or he may not. That drama will play out in the weeks ahead. But let’s keep an open mind about this.

A Second Alternative

A second alternative would be to go further in debt, increasing the federal debt from its current $ 21 trillion to $ 23 trillion. This would be like drawing down even more debt on a federal credit card that has long ago already exceeded its limit. So far, with interest rates at record lows, going into debt has been workable. The challenge there is the day when holders of American dollars lose confidence in them. That’s when interest rates will start rising and the federal debt will become unmanageable. Until then though, just printing more money could work. This would be the lazy way out of the challenge, seemingly the least painful way immediately, but likely to cause a terrible hangover down the road.

But there is a third way. And this fits with the already mentioned Biden’s willingness to consider alternatives.

Paying For Infrastructure Repairs Using Immigration

The third way would be to adapt an investor immigration program to pay for at least some of the infrastructure plan. The current U.S. EB-5 investor immigration regional center program includes a component in which foreign investors invest $ 900,000 for a period of five years on a project approved by the U.S. Citizenship and Immigration Service (USCIS). Each application must create at least 10 new jobs and enables such an investor and his or her family to immigrate to the United States permanently. Out of about one million applicants who immigrate to the United States each year, current allowances allocate only 10,000 slots to such foreign investors and their family members. However, it would not be hard to imagine how this program could be altered to help pay for Biden’s plan over a period of time. That would mean we would get the same result Biden proposes, without it costing Americans as much since the cost would be paid by new foreign investment brought into the country.

Suppose, for example, we agreed to increase the number of investor-related visas coming into the United States per year from the current 10,000, to say 100,000. Assuming each family on average has four persons, that would mean there would be 25,000 investors coming into the country under such a scenario. If each investor invested $ 900,000 and created 10 new jobs as required under the EB-5 program, that would mean the EB-5 program could generate $ 22.5 billion in revenues and 250,000 new jobs per year.

To be more exact, Biden’s plan calls for over $ 2 trillion in investment to be spent and paid for over 15 years. Using that as a measuring stick and assuming the $ 900,000 per investor would remain the same under the USCIS program, it would mean we would aim to attract some 375,000 investors to the United States over 15 years and earn just under $ 340 billion. However, if you spread this effort out over say a 40-year time frame, such an effort would exceed $ 1 trillion in investments.

Long Term Thinking

There are about 15 million millionaires in the world today outside of North America. This plan would call on attracting less than 10% of them to America over the next 40 years. That may not be easy, but maybe it could be done. The key thing is that such a program would generate 10 million new jobs for Americans. Assuming such a program was ongoing, the amounts invested would be repaid with ongoing investment over time. Further, this doesn’t even consider what other investments each such family would make in America as they buy houses, send kids to schools and spend money on consumer goods.

Maybe these assumptions about the EB-5 program are too unrealistic or miss the mark in some way. Even so, they do illustrate how the EB-5 program could help defray at least some of the costs of Biden’s proposal if used in combination with other ways of funding it. By tinkering with the various options available, a package may be created that will impose less of a burden on U.S. taxpayers and spur the economic recovery at the same time. It is worthwhile to consider these alternatives in this context.

Source: How To Fund Biden’s Infrastructure Plan Using Immigration

Antigua PM accuses US of trying to kill Caribbean citizenship by investment programs

Of note:

Antigua and Barbuda’s Prime Minister, Gaston Browne, is accusing the United States of America of trying to “kill” the Citizenship by Investment Programs (CIP) in the Caribbean.

Browne said to listeners on his weekly radio program Saturday gone, that “It seems as though they don’t want us to operate the CIP so they want to kill it”

“They attacked St Kitts and Dominica too. And they do that so often I don’t even know what to say. But anytime they kill it, countries like Dominica and St Kitts, their economies will be decimated and they will plunge tens of thousands of people e in poverty and then you end up with so many social ills,” said

His comment comes on the heels of a report last week, where the US government cited the CIP in three Caribbean countries for “lack of transparency”.

In the ‘Corruption and Lack of Transparency in Government,’ section, the 2020 report identifies the CIP programs in Antigua & Barbuda, Dominica and St. Kitts & Nevis as citizen concerns on oversight and corruption due to a lack of openness.

In Dominica, the US report pointed to local media and opposition leadership, who continue to raise allegations of corruption within the government, including in the Citizenship by Investment program and pointed to the fact that while the law provides criminal penalties for corruption by officials … the government implemented the law inconsistently.”

And in St. Kitts & Nevis, the US report pointed to media and private citizens reporting on government corruption “occasionally” even as citizens “expressed concern about the lack of financial oversight of revenues generated by the Citizenship by Investment (CBI) program.”

Browne said instead of using information to disparage these countries, the United States should instead work with these small island developing states.

“Let us work together and strengthen the relations with the United States, Dominica, St Kitts…. I mean trying to use this information to disparage us is unhelpful. If it was truthful, I would understand,” he said.

The CIP Programs in the Eastern Caribbean countries have been a source of continued criticism by the US and many nationals locally who question the use of “donation” funds that are part of the attractive offer for a second passport in these jurisdictions and visa free travel to between 152 and 162 countries.

Five Caribbean countries offer the CIP programs but neither Grenada nor St. Lucia were cited for lack of transparency in the report.

Methodology for Investment Migration Programs 2021 (Henley & Partners)

For those of you interested in indexes and citizenship and how the private companies make their assessment:

In constructing the Global Residence Program Index (GRPI) and Global Citizenship Program Index (GCPI) we have referred to multiple sources and experts to obtain and interpret the primarily qualitative data used. We have relied principally on the expertise of residence and citizenship analysts and the experience of investors and government officials. As a result, the explanatory power that supports the scores in the different categories is based on surveys, interviews with respondents, and opinions solicited from selected experts. Where possible, the subjectivity of the various factors has been assessed against publicly available data and widely accepted composite indicators.

The data for surveys and interviews has been consistently collected from a representative sample that includes respondents, experts on citizenship, and practitioners who have been involved in the design of qualitative research in global mobility and related spaces. The sample frame for respondents consists of existing and potential investors, their advisors, and government officials in countries that either already have, or are in the process of establishing, investment migration programs. Relying on potential clients means that the responses of those who decided against proceeding with any program are also included. It may also be noted that among our respondent and expert base are government officials and consultants engaged in investment migration programs that have been discontinued as well as those that are in the process of being established or reformed.

The factors that are analyzed in each of the indexes are as follows:

Global Residence Program Index

  • Reputation
  • Quality of Life
  • Visa-free or Visa-on-arrival Access
  • Processing Time and Quality of Processing
  • Compliance
  • Investment Requirements
  • Tax
  • Total Costs
  • Time to Citizenship
  • Citizenship Requirements

Global Citizenship Program Index

  • Reputation
  • Quality of Life
  • Visa-free or Visa-on-arrival Access
  • Processing Time and Quality of Processing
  • Compliance
  • Investment Requirements
  • Residence Requirements
  • Relocation Flexibility
  • Physical Visit Requirements
  • Transparency


Reputation relies on the perceptions of investors and advisors regarding the image of the countries in which they invest. This indicator is subjective by nature, but much like the Attractiveness Indicators employed by the IMD in its Executive Opinion Surveys, our intention was to allow our respondents and informants the space to consider intangible and unanticipated factors while assessing the reputation of destination countries.

Endeavoring to assess reputation is not new, and the relationship between reputation and outcome is a popular mechanism for assessing the competitiveness of organizations, cities, and even regions. Furthermore, the reputation of a country, much like the reputation of a corporate, is a historical indicator that allows its previous efforts to meet investor expectations to be assessed.

Quality of Life 

The assessment of Quality of Life (QoL) uses a wide range of methods to evaluate subjective perceptions of various sample groups in different contexts, as well as developing factors that are independent of subjective perceptions. Like Reputation, QoL could well benefit from considering investors’ experiences and what is particularly relevant to individuals who are interested in investment migration.

We are aware, moreover, that there are substantial institutional efforts in developing composite indicators for QoL — the United Nations Human Development Index is one of the most comprehensive (relying on life expectancy at birth, schooling, literacy rates, and gross national income per capita). These factors do not cover all civil and political liberties though; for assessing democratic values, Freedom House’s Freedom in the World report is a preferable indicator.

As our focus is also on investment, the World Bank’s Doing Business reports are pertinent, since investors may have to negotiate the regulatory environment of destination countries for a variety of economic activities. We have sought to anchor the framing of our questions in established indicators but recognize that such indicators do not always correspond to what is being assessed in the GRPI and GCPI.

Visa-free or Visa-on-arrival Access

The methodology for this factor is relatively straightforward. It aims to measure an improvement in the mobility of an investor, or their ability to enter additional countries visa-free or with visa-on-arrival access as a result of being a citizen of, or resident in, a particular jurisdiction.

For the GCPI this factor relies on the 2021 Henley Passport Index, which curates data from 227 different travel destinations (including countries, territories, and micro-states), collated by the International Air Transport Association, to arrive at the ranking. The Henley Passport Index compares data on the number of destinations that a citizen of a given country can visit without requiring a prior visa. A relaxed travel policy is worthwhile in itself, but it also characterizes a country’s political regime and the extent of its civil liberties.

While acquiring alternative citizenship is more directly linked to ease of travel, an alternative residence can also enhance the mobility of individuals. It thus also features as a factor that motivates residence investments and is included in the GRPI.

Processing Time and Quality of Processing

Processing time for applications and their quality of processing are two distinct aspects that are assessed differently. Some countries may offer a short processing time between lodging an application and issuing a visa or permit, but there may be uncertainties in administrative processes. In this regard, input from respondents has proved valuable: the responses and analysis thereof have verified the official or declared processing time and complemented the ‘hard’ data on actual processing time taken (namely, the number of days), including obstructions faced.


Countries have different procedures and varying due diligence requirements for profiling applicants (including criminal records and financial statements), sources of funds, the manner of fund transfers, and the vulnerability to abuse of the funds invested. The standard measures adopted are best practices developed by international associations and professional agencies for anti-money laundering, counter-terrorist financing, and anti-bribery and corruption. The EU, unlike the USA, does not have a joint or federal procedure for conducting due diligence, so EU countries differ widely in terms of their national rules. Clear information and frameworks regarding due diligence facilitate better risk assessments for potential investors. A more intensive due diligence requirement may be an advantage as this translates into less uncertainty in private investments. Since financial institutions usually engage in Know Your Customer audits regardless of the regulations of investment migration programs, they are less vulnerable than private investments. Vulnerability to money laundering in different sectors could, furthermore, be avoided in the presence of clear regulations.

Investment Requirements

The upfront investment amounts for residence differ in terms of amount required, nature of investment, and additional costs. For this indicator, we consider the required investment amounts. The range in the stated amounts is broad and the nature of the investment is not always left to the discretion of the investor. Options for different forms of investment are specified by the destination governments, largely depending on policy considerations and benefits to the respective countries. Generally, a country offering more choice in how to invest and requiring lower investment amounts (including additional costs) scores higher.

Because of the unique nature of citizenship-by-investment (CBI) programs, investment amounts are substantial, and the accompanying conditions do not allow much choice in the nature of the investment. There is a noticeable pattern to the investments required for CBI programs: the investment amounts are generally greater than those required by residence-by-investment (RBI) programs, there is usually a requirement or at least an option to purchase real estate, and there is usually a requirement or an option to make a non-refundable contribution.


This factor raises the question of the extent of the tax burden that a resident is required to bear for both corporate and personal economic activities. It is rare for a country not to impose any taxes on its residents. The only two countries in our indexes that have that distinction are Monaco and the UAE, since they do not impose personal income tax, property tax, capital gains tax, or net worth taxes. For all other countries, preferential tax schemes and tax waivers, and incentives for applicants with significant investments heavily influence the score arrived at for this factor.

Total Costs

The stated investment amount does not always constitute the total actual cost an investor must bear to acquire residence status. As the nature of investment differs considerably across programs, it is difficult to compare the total actual cost of investment. Programs that offer a range of investment options score higher in this sub-indicator. Some investors have, however, raised questions about the uncertainties and volatility of foreign markets and therefore the value of choosing options that appear to be safer. Generally, destination countries that reduce investors’ opportunity costs by providing a wider choice of investments or by offering incentive-based investments are considered by investors to be more attractive.

Time to Citizenship

The time it takes applicants to gain citizenship is one of the criteria for assessing a RBI program’s attractiveness.

This refers to the process of naturalizing as a citizen once already a resident, which is distinct from direct CBI. Countries that have appeal in this regard offer a relatively fast path to citizenship, mainly because the time it takes to naturalize is comparatively short. However, this factor considers both the formal time required and any physical presence requirements. Countries with prohibitive rules governing the transition to citizenship score zero.

Citizenship Requirements

This factor examines all the requirements to qualify for naturalization after the specified minimum time has been fulfilled, including physical presence requirements, additional investment requirements or other ‘commitment’ requirements, and other requirements to qualify for citizenship, such as language requirements and cultural integration tests. In some countries, the transition from permanent residence to citizenship is less demanding and there are minimal additional requirements. Other countries have stringent physical presence but few additional requirements.

Residence Requirements

None of the countries ranked in the GCPI impose demanding conditions of residence. Smaller countries keen on attracting investment use waivers or substantial reductions in residence requirements to their competitive advantage.

Relocation Flexibility

An assessment of the number of citizenship investors in the different countries reveals that a substantial percentage of them apply for the migration of family members with the intention of either settling in the destination country or keeping the option open in case they need to leave their home countries. For this factor, we evaluated first the number of investors who indicated their intention to relocate and compared it to the number of investors who have relocated, in order to gauge which countries are conducive to relocation. Subsequently, we assessed the factors facilitating relocation. In this regard, EU member states have a clear advantage because a citizen of an EU member state can consider relocating to another member state or to a choice of several additional countries that have agreements with the EU, such as Switzerland. Though such relocation is not automatic, the rules are well established, they provide clarity on how and when relocation to another EU member state is permissible, and the process entails lower information costs. Destination countries’ efforts towards enabling family unification, and the ease with which they deal with private property, reduce the uncertainties that relocation can entail. Furthermore, for citizens who can support themselves financially, EU law imposes very few restrictions on their freedom to relocate.

The rule of law plays an important part in informing investors’ choices in relocation: their confidence in an existent fair process for securing personal freedom, settling investment disputes, and the legal wherewithal to negotiate with government authorities, all point towards a higher score.

Physical Visit Requirements

This indicator assesses whether physical visits are required as part of the application process, usually for interviews, oath-taking ceremonies, and passport renewals, by evaluating the number of visits required and the bureaucracy of the processes that precede them.


The World Economic Forum’s transparency indicators for CBI programs are: public support, evaluation studies, availability of public data, and due diligence criteria. No GCPI countries publish evaluations of CBI inflows, but the other criteria inform the structure and content of the surveys, which inquired about access to clear information on application processes, including due diligence, and how funds are used. Although many investors wish to understand, and preferably choose, where their investments are used, investments are often deployed in predetermined ways, making it difficult to influence their use. The visibility of such contributions in domestic projects and the earmarking of funds influence investors’ decisions and perceptions of program transparency.

Circulating such information is advantageous as it enables investors to conduct meaningful risk assessments. Furthermore, the impact of investments on potential and existing businesses could influence business decisions. The pivotal aspects for transparency are program rules and regulations, and processes and their implementation in program administration.

Source: https://www.henleyglobal.com/publications/investment-migration-programs-2021/methodology

IMC Defends Sovereign and Societal Value Creation of Investment Migration Programs [citizenship-by-investment]

Of note. The international lobby group for citizenship-by-investment programs argues (unconvincingly) its case. No Canadian firms that I recognized:

The two-month deadline set by the European Commission for the governments of Cyprus and Malta to reply to the letters of formal notice regarding their citizenship-by-investment pathways is approaching. In advance of this date, the Investment Migration Council (IMC) wishes to engage with all relevant stakeholders and remind them of a number of salient points.

The legal case

The right to assign citizenship is very clearly the sole competence of a sovereign state. This analysis of the European Commission’s legal case has nothing to do with whether one agrees with the concept of citizenship by investment. The vast majority of EU legal experts argue that the Commission has no legal right to become involved in how sovereign states define citizenship law.

The IMC has sought the opinions of several legal scholars, including Professor Dr Daniel Sarmiento, a leading specialist in EU competence law, and Professor Dr Carl Baudenbacher, the former president of the EFTA court. The conclusion is clear: The EU has no competence in the area of citizenship. Moreover, the concept of ‘genuine link’ that was invoked by the EU is both vague and arbitrary. The European Court of Justice already found in earlier decisions that it is not relevant.

It is therefore unlikely that the European Court of Justice would rule in favour in the matter at hand, as this could have very serious secondary consequences, and could open the way for the EU to encroach on the power of granting nationality, which is reserved, in EU Law, for Member States.

As rightly noted by the European Parliament, “Nationality is defined according to the national laws of that State.”

Strong governance and due diligence

The IMC however understands and shares the concerns of both the EU and wider stakeholders around the question of proper due diligence on applicants to such programs. This is why it has developed, in cooperation with international anti financial crime firms BDO, Exiger and Refinitiv, a common best practice framework and developed a blueprint for good governance through due diligence standards to uphold the highest levels of integrity and transparency. [Download the ‘Due Diligence in Investment Migration: Best Approach and Minimum Standard Recommendations’ Report]

Nevertheless, the IMC suggests that there has been a significant exaggeration of the risks. Working in partnership with Oxford Analytica, the leading geopolitical risk analysis and advisory firm, it has identified that for all the publicly voiced concerns, the due diligence and governance in place already acts as a powerful deterrent. [Download the ‘Due Diligence in Investment Migration: Current Applications and Trends’ Report and the ‘Citizenship by Investment Programmes: An EU Risk Assessment’ Report]

Oxford Analytica found that the operational reality is that investment migration risks are primarily theoretical in nature. This assessment is broadly shared with the intelligence, security, and law enforcement professionals involved in managing investment migration. Potentially nefarious activity is a negligible percentage and compares very favourably to other legal migration pathways.

There are, of course, enhancements that should be made at corporate, sovereign state, and intragovernmental information sharing levels. The IMC and its membership community are committed to the highest of standards. We want to work in partnership with the relevant stakeholders to devise a formal regulatory system that mirrors those of financial and professional services providers and that will ensure the necessary protection. That system should be based on an objective and knowledgeable analysis of the reality of investment migration, not one that is based on scare stories and rumour.

A creator of societal and sovereign value

Investment migration is a vital lever for sovereign nations to raise debt-free capital, attract talented individuals, and deliver benefits to society as a whole. In Malta, to mention but one example, the Individual Investor Programme attracted EUR 1.4 billion directly into the island nation’s economy following the damaging Euro crisis. This liquidity has had profoundly positive consequences. There has been significant employment creation across all levels of society, and the Maltese government has greater autonomy to invest in vital infrastructure projects, some of which involve critical care for cancer patients.

Bruno L’Ecuyer, CEO of the IMC commented: “Investment migration pathways are now a well-established, normalised wealth management advisory practice. As is the case with other established financial and professional services practitioners, we want to work in partnership with all relevant stakeholders to ensure that sovereign and societal value can be maximised through prudent, responsible, and objective regulation.”

For this to happen, all investment migration advisors must run operations to the highest possible standards and be prepared to face the consequences if they are found wanting. Equally, stakeholders must understand that the privilege of granting citizenship and residence rights is solely the domain of a sovereign state, and that significant sovereign and societal value can be created through investment migration, particularly in the Covid era, which moreover in many instances is aligned with the UNs Sustainable Development Goals.


About the Investment Migration Council

The Investment Migration Council (IMC) is the worldwide association for Investment Migration, bringing together the leading stakeholders in the field and giving the industry a voice.

The IMC sets the standards on a global level and interacts with other professional associations, governments, and international organisations in relation to investment migration.

The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members.

The IMC is constituted as a not-for-profit association under Swiss law. Based in Geneva, it has representative offices in New York, London and the Cayman Islands. Managed by a Secretariat under the direction of a Governing Board, the IMC also has a non-executive Advisory Committee, in which the most important industry stakeholders are represented. The IMC is funded by membership fees, donors and income from activities such as events, education, training, and publications.

(Membership list can be found here: https://investmentmigration.org/members-directory/ )

Source: IMC Defends Sovereign and Societal Value Creation of Investment Migration Programs

Green: Canada should revive the investor immigrant program and fix its past failures

Not aware of any studies that show meaningful benefits from investor immigration programs in OECD countries. Green is notably vague with respect to how he proposes to “fix its past failures” beyond increasing the investment threshold. The IRCC evaluation was devastating (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjN2Z6D2qDtAhX8GFkFHWXyCD4QFjAAegQIAxAC&url=https%3A%2F%2Fwww.canada.ca%2Fcontent%2Fdam%2Fircc%2Fmigration%2Fircc%2Fenglish%2Fpdf%2Fpub%2Fe2-2013_fbip.pdf&usg=AOvVaw2KiDUWqxbDR2xBXtujZnYm) and census data indicates the median incomes based on tax data to be minimal and lower than refugees. Quebec’s comparable program largely serves as a backdoor entry to other parts of the country:

From the earliest days of Confederation, immigration has been essential to Canada’s evolution and identity as a country. The labour – and tax dollars – of successive waves of people from around the world have supported universal health care, pension plans, education, national infrastructure, and the creation of small businesses and employment.

The economic stress caused by a global pandemic, on top of the dual realities of an aging population and a slow-growing population, make immigration more important than ever. It is also an opportune time for Canada to revive the investor immigrant program that was terminated in 2014, with a view to integrating it into our long-term economic strategy.

The federal government has clearly flagged that expediting immigration to Canada is a priority over the next several years.

In addition to setting a target to welcome 401,000 permanent residents in 2021, Ottawa recently made it easier for Hong Kong students and youth to quickly come to Canada on work and study permits, as well as offering new ways to stay permanently. The new permanent residence rules will also benefit people from Hong Kong already in Canada under existing work and study permits.

Then there’s the 300,000 Canadian citizens living in Hong Kong, many of whom, in light of recent political developments there, may be contemplating a return.

Also consider that although many applications were delayed by COVID-19, most are already well down the approval pipe and will proceed quickly once embassies and visa agencies fully reopen. Ottawa has already flagged that it will work to fast-track increased admission to Canada in 2021.

For all of that, there is much more that can be done for both prospective immigrants and Canada. At the top of that list is a practical reassessment of the investor immigrant class.

In 2020, the practical benefits of reviving the program far outweigh any misplaced concern about those “buying” Canadian citizenship.

Let’s not be hypocritical: Those of us already fortunate enough to live here stand to benefit as much as anyone who is new to the country.

The key to making it work this time around is to be clear-eyed about past failures, to refine the tax structure and better manage the five-year deposits required by these immigrant investors. It does not seem excessive to increase the $800,000 fee that was required before the Harper government cancelled the program. But in the past, those deposits were directed to provinces to foster the growth of small and medium-sized enterprises – a well-intentioned initiative that never took shape.

By learning from that disappointing experience, Canada can win on several counts.

It can seize opportunity to create a COVID-19 fund to help offset the economic cost of the coronavirus and attract immigrants who have the means to make a big difference in short order.

It can also attract a group of educated and financially secure immigrants who, along with their families, will make a lasting contribution to our economy. It is also an opportunity to bring regional and local governments into the process to ensure the funds are put to the best use.

Nowhere would that difference be felt more immediately than in the stabilization of the domestic residential real estate market, small business and employment, something of great importance to all Canadians and their families.

For some time now, there have been claims that housing markets, especially condominiums in urban centres, are threatened by an imbalance of supply and demand.

That’s a tough prospect for municipalities and provinces that have already been economically ravaged by the effect of the coronavirus.

Higher immigration levels – especially in the economic class – address this on a number of levels.

Furthermore, while much has been made of the pandemic-driven urban exodus, new Canadians tend to gravitate to and revitalize our cities.

Immigration is an important way for Canada to build long-term economic, social and cultural bridges around the world. Does anyone think it will be anything but beneficial to our relations with Washington that vice-president-elect Kamala Harris had such a positive experience as a student in Montreal?

We have always been justifiably proud of being a country of immigrants. Clearing the 2020 backlog, expediting new permanent residency applications and reinstating the investor immigrant class is both timely and strategic at a time when we need to reinforce our country as seldom before, and to ensure the long-term prosperity of all Canadians.

Green is a Managing Partner at Green and Spiegel and past chair of the Canadian Bar Association, National Section, Citizenship and Immigration

Source: https://www.theglobeandmail.com/business/commentary/article-canada-should-revive-the-investor-immigrant-program-and-fix-its-past/