Fewer Americans gave up their citizenship in 2017 | New York Post

The latest numbers:

For the first time in five years, the number of Americans renouncing their citizenship decreased in 2017, government records show.

Renunciations for the year fell 5.1 percent, to 5,133 — after a four-year climb to a record 5,411 in 2016, according to the IRS.

But the real story lies in the fourth quarter, when the number of renunciations tumbled 71 percent from the same period in 2016.

While a direct cause for the decline is not known, it was in the fourth quarter that buzz began to build around a tax cut.

Taxes, and the fact that citizens living abroad still owe the IRS, are often cited by those giving up their citizenship as the reason for the move. President Trump signed the tax overhaul bill into law on Dec. 22.

Fewer Americans feel they must employ the life-altering tactics of Facebook co-founder Eduardo Saverin, pop star Tina Turner and socialite-songwriter Denise Rich — all of whom cut their US tax liabilities by renouncing their US citizenship.

The departures so angered Sen. Chuck Schumer (D-NY) that he introduced the Ex-Patriot Act in 2012, aka the Saverin Bill, in an unsuccessful attempt to keep tax dodgers from stepping on US soil again.

Marc J. Strohl of international tax firm Protax Consulting Services, sympathizes with Schumer.

“We have every right to be upset with Americans who walk out of here with millions in their pockets,” Strohl said.

The CPA also noted that since 2010 the number of expatriates exceeded 1,000 in every year but one.

“Most everyone who wanted to leave has already left,” he concluded.

via Fewer Americans gave up their citizenship in 2017 | New York Post

UK: Home Office citizenship fees ‘scandalous’

Not just cost recovery. as in the case of expensive US and Canadian fees, posing a barrier to integration:

The Home Office has been criticised for making more than £800m from nationality services over the past six years.

Young people who have citizenship rights – including thousands born in the UK – have to pay up to £1,000 to register formally as citizens.

Campaigners claim the fees, which they say many youngsters cannot afford, are a “terrible injustice” and “nothing short of a scandal”.

The Home Office says the fees are fair and fund the wider immigration system.

What is registration?

Nationality services include naturalisation fees, registration fees, and other nationality-related payments. Naturalisation is the process of applying to become a British citizen.

Registration is the process where someone who has an existing right to British citizenship – for example, through residency, parentage, or birth – but does not currently hold citizenship, applies to obtain it.

If a young person does not register, and does not otherwise gain settled status, they could risk being subject to immigration controls, despite having grown up British.

Fees have risen since 2011, and the cost of registering two children has more than tripled due to fee increases and the abolition of second child discounts.

Another freedom of information response showed registrations cost the Home Office £264 to complete, despite applicants being charged £936 in the 2016-17 financial year.

Samson Adeola, 18, from Walthamstow, had to borrow money to pay his fees last year and said he was angry the Home Office was making so much money.

Mr Adeola, who was born in Nigeria, moved to London with his family when he was five and although had rights to citizenship, did not hold it.

He said without it, if he was going on to university, he would be forced to pay significantly higher tuition fees as an international student.

He also said he had missed out on the chance to perform in the opening ceremony of the London 2012 Olympics because he did not have citizenship at the time.

“It was very difficult for my mum, going around finding the money [for the Home Office fees],” he said, adding the family borrowed a “substantial amount” from their local church.

Chart showing the changes in fees for nationalist services

He said the family still had not repaid all the money, and he had taken a job as a pizza delivery boy to contribute.

“Balancing it with schoolwork is difficult – last night I got back really late,” he said.

“It’s really tiring and draining and it can take your mind off your studies.”

He said it was “really upsetting” the fees were so high, “especially for people who can’t scrimp and save the money together, and can’t put forward an application because of the cost”.

The family will also have to pay for each of Mr Adeola’s siblings, aged 10 and 15, to register if they want British citizenship, despite the fact the ten-year-old was born in the UK.

Solange Valdez-Symonds, director of the Project for the Registration of Children as British Citizens said: “For the Home Office to be exploiting this to make vast sums of money to spend on its immigration responsibilities is nothing short of a scandal and an especially terrible injustice to those children who cannot afford the Home Office’s fees.”

A Home Office spokesperson said: “When setting fees, we also consider the benefits that a successful applicant is likely to gain and believe that it is right that those who use and benefit directly from the system make an appropriate contribution towards meeting associated costs.

“British nationality applications are not mandatory and many individuals decide not to apply.”

Source: Home Office citizenship fees ‘scandalous’

GOP Ignores Scandals, Keeps Funding U.S. Citizenship-for-Investment Visa – Breitbart

Sometimes there are nuggets in Breitbart:

The scandal-plagued EB-5 visa, which allows foreign investors and their families to essentially buy U.S. citizenship, is continuing to be funded by the Republican-controlled Congress.

Under the EB-5 visa, wealthy foreign nationals can claim that they will invest at least $500,000 and thus receive Green Cards for their family for at least two years, with pathways to citizenship available as well. The only requirement is that the EB-5 holder creates ten U.S. jobs. Currently, 10,000 foreign nationals and their families are allowed to enter the U.S. every year on the EB-5 visa.

Despite the visa program being a magnet for corruption and scandal, the Republican-backed budget that averts a shut down of the federal government continues funding the program.

Less than a month ago, five companies with Vermont’s Jay Peak resort developments reached a settlement after the Securities and Exchange Commission (SEC) accused resort owner Ariel Quiros of embezzling tens of millions of dollars by using the EB-5 visa.

The SEC accuses Jay Peak owner Ariel Quiros of embezzling tens of millions of dollars from foreign investors using the controversial EB-5 visa program, through which foreigners, usually Chinese, can obtain U.S. green cards if they invest $500,000 in certain American-based projects. Since 2008, it is alleged Quiros took more than $50 million dollars of the $350 million he raised from EB-5-seeking foreigners for his own personal expenses, in effect using the promise of U.S. permanent residency to run a massive “ponzi-type” investment fraud.

The SEC seized Jay Peak’s assets as they brought suit against Quiros in 2016, alleging he was using EB-5 investor funds to “(1) Finance his purchase of the Jay Peak resort; (2) back a personal line of credit to pay his income taxes; (3) purchase a luxury condominium; (4) pay taxes of a company he owns; and (5) buy an unrelated resort.”

Wednesday’s settlement involved five contractors who worked with Quiros on the water park at Jay Peak: Black River Design Architects PLC; DEW Construction Corp.; VHV Co.; FabricAir Inc.; and Ramaker and Associates Inc. According to Law360, the companies deny wrongdoing but agreed to settle the case for $45,000 each.

In 2016, Breitbart News reported on an EB-5 visa fraud case where a wealthy Chinese national was able to land an EB-5 visa by promising to invest in a New York development, but then allegedly ended up using the investment money on personal expenses like buying a boat, a luxury car, and a home.

Last year, Breitbart News reported how investment firms are now pushing the EB-5 visa in India, trying to get wealthy Indian nationals to promise an investment in order to gain U.S. citizenship for themselves and their family.

When wealthy foreign investors come to the U.S. on the EB-5 visa, it only takes them two years of being in the country before they and their families can apply for permanent legal residency. From there, they can later apply for U.S. citizenship and become naturalized citizens.

Critics of the EB-5 visa, like Center for Immigration Studies analyst David North, who has testified before Congress on the corruption involved in the EB-5 process, says the visa is a way for U.S. citizenship to essentially be sold.

via GOP Ignores Scandals, Keeps Funding U.S. Citizenship-for-Investment Visa – Breitbart

Saudi Shura Council approves citizenship amendment study | GulfNews.com

Inching forward:

History could be in the making in Saudi Arabia after the Shura Council cleared the first hurdle by approving a study of two proposals to amend the citizenship law and allow women to pass on the Saudi citizenship to their children.

The proposals were initially submitted by three members in the previous term — Haya Al Manee’, Thuraya Abaid and Wafa Teeba — and taken up by two current members — Latifa Al Shaalan and Atta Al Subaiti.

Following a heated debate at the council on Tuesday, 63 members voted in favour of the amendments, ensuring that they are passed. They now go to the security committee that will present a final report to be discussed by the council at a later stage.

During the discussion on Tuesday, Shura member Fahd Al Enezi, a legal expert, said he vehemently opposed the amendments, resorting to religion to highlight his argument.

“Children must be attributed to their fathers, not to their mothers as is clearly stated in our religion,” he said. “A Saudi woman has the option to marry a non-Saudi. It is her choice. However, the citizenship is not her option and she is aware that her children will not obtain the Saudi citizenship.”

However, Faisal Al Fadil, also a legal expert, said that citizenship is a human right within the religion and is part of the fight against discrimination.

Mohammad Al Ali used economic arguments to call for defeating the proposals.

“Saudi Arabia is basically a desert nation and the quantity of water is limited,” he said as he presented virtual statistics about the high population in case Saudi women passed on their citizenship to their children, Saudi daily Okaz reported on Wednesday.

Abdullah Al Harbi warned of a waste of resources.

“Most of those born to Saudi mothers are competent and not giving them the Saudi citizenship is a loss to an efficient segment in the Saudi society, especially that they grew up in the kingdom and were educated here,” he said.

“Most countries allow women to pass on their citizenship, including in some Arab countries that have high population figures but whose economic development standards do not keep up with those of Saudi Arabia.”

He said that granting the citizenship would alleviate economic burdens for families and ensure promises of a brighter future for the children.

The issue of residency permits and entry visas required from non-Saudis living in the kingdom hampers the academic progress of the sons and daughters studying abroad since they have to go back to Saudi Arabia before their expiry, he said.

“The sons and daughters who are born in Saudi Arabia and grow up here develop strong links to their family and the Saudi society. Such attributes instill in them a sense of allegiance and belonging. However, if they are treated after graduation from colleges as foreigners, they are bound to face a multitude of hurdles even if they are top of their classes,” Al Harbi said.

Iqbal Darandari said she fully supported the amendment proposals.

“True faith is to be fair to all people,” she said. “There are children born here in Saudi Arabia to Saudi mothers. They grew up here and they know no other land. Where will they go if they do not have the citizenship?”

Darandari said that everyone should feel they are accountable before God for not assisting people.

In her argument, Noora Al Musaad said there was a deep need for endorsing the amendments.

“Most countries across the world allow mothers to pass on their citizenship to their children,” she said. “What we now have is a form of discrimination.”

via Saudi Shura Council approves citizenship amendment study | GulfNews.com

How the Australian Constitution, and its custodians, ended up so wrong on dual citizenship

For those interested, a good analysis of how Australia ended up in this mess regarding dual citizenship and political qualifications by Hal Colebatch of University of New South Wales:

The final session of the constitutional convention was held in Melbourne early in 1898. There was no further discussion of what became the now-infamous section 44, and a drafting committee took over to prepare a final draft.

Edmund Barton – soon to become Australia’s first prime minister – was the chair and dominant figure. He insisted on working till 4 or 5am, even though the other two members of the committee had gone to bed and only Robert Garran, the secretary, was left to maintain the illusion of a committee.

After four days of drafting, Barton presented the convention, on its second-last day, with 400 amendments. He proposed a three-hour break for the delegates to study them, after which they could be put to the vote en bloc.

Barton assured the convention that there was only one amendment of substance – to section 44(ii). What he did not say was that section 44(i) had been completely rewritten, changing it from an active voice (“done any act whereby”) to a passive voice (“is a subject or citizen … or is entitled to”).

No attention was drawn to this change, there was no explanation of it, and there was no time for debate on any clause unless someone objected to it. The constitutional text that proved so significant more than a century later was a last-minute change, drafted in private and accepted out of weariness.

In his history of the convention, J.A. La Nauze points out that, by this stage, the delegates “had had enough”, but muses:

it may one day interest a curious lawyer to inquire whether judicial review has lingered with significant consequences on new words approved on trust and intended … merely ‘to put the wishes of the convention in more complete and concise form’.

As it turned out, it interested more than the curious lawyer, and created a problem which has yet to be adequately managed.

Appealing to the umpire?

The constitution was rather unclear about how these provisions would be enforced. It said both that questions about qualification could be settled by each house, but also that “any person” who believed that an elected representative was disqualified by section 44 could sue them in “any court of competent jurisdiction”.

In any case, there was little call for either until the High Court decided in 1999 that the UK was a foreign power.

Even then it refused to hear a case calling for Tony Abbott and Julia Gillard to produce evidence they had renounced their UK citizenship, on the basis that they had declared that they were qualified, and so the court should presume that they were. To do otherwise would be a vexation and an abuse of the court’s time.

But when the court did deign to interest itself in the matter, it took the traditional High Court view that it was not interested in the problem, or what the writers of the constitution were trying to do, but only with the possible meaning that a black-letter lawyer could squeeze from these words, irrespective of its impact on the governing of Australia.

Where does this leave us?

The situation now is that the qualifications for candidature for the Australian parliament are set by the parliament, but the disqualifications are largely set by foreign governments via the High Court. This diminishes the ability of electorates to choose the representative they want (though, when given the chance, electorates show what they think of the High Court’s action by returning the ousted members in the ensuing byelection).

And the High Court’s escapade in the china shop is not yet over, for it has yet to rule on the disqualification of those who are “entitled to” foreign citizenship, even if they have not applied for it. If the court applied the same logic that it has used in the cases already decided, this would disqualify not only any Jew, but also anyone with a Jewish parent, grandparent or spouse, all of whom are entitled to Israeli citizenship under the Israeli Law of Return.

The best course would be to start with recognising the problem, rather than searching for a preferred solution. In contemporary Australia, identities are often complex, and citizenship entitlements may be multiple and overlapping. How these are to be recognised in the qualifications for candidature demands a period of public discussion culminating in political action.

The only way we could get this is to take the matter out of the hands of the High Court and foreign governments and return the task of defining qualifications and disqualifications for candidature to parliament. This could be done by adding to section 44 the phrase “until the parliament otherwise provides”, which is used in section 30 on qualifications, and at a number of other points in the constitution.

This would be a logical and constitutional response to the political problem that has landed on us. If the five main parties in the parliament (all of which have had their parliamentary representation threatened by the High Court’s actions) supported a referendum to achieve this change, it would probably be carried.

The voters, too, as they showed in New England and Bennelong, have had enough. They want the political leaders to lead.

via How the Australian Constitution, and its custodians, ended up so wrong on dual citizenship

Son of Russian spies can travel home to Canada, judge rules

I agree with the government on this one. And the brothers have lived abroad most of their lives with the main connection to Canada being their passport:

A judge has ordered the Trudeau government to issue citizenship documents—and a passport—to the Toronto-born son of elite Russian spies, ruling that the 23-year-old should be allowed to return to Canada even though the Supreme Court is still pondering whether to hear one last appeal in his controversial case.

Alexander Vavilov was stripped of his Canadian citizenship “through no fault of his own,” the judge ruled, and after winning it back last summer at the Federal Court of Appeal, he should not be forced to wait in limbo while Ottawa tries to convince the country’s top court to overturn that decision. Instead, the Liberals should reinstate Vavilov’s revoked citizenship—and allow him to come home—pending any potential ruling from the Supreme Court.

“It is difficult to accept that issuing these documents to this one person will cause significant and irreparable harm to the public interest,” wrote Justice Wyman Webb of the Federal Court of Appeal, in his Jan. 19 decision. “There is no allegation that Mr. Vavilov did anything wrong.”

Ottawa has fought for years to keep Vavilov from re-entering his country of birth, and despite this latest ruling the government is still doing all it can to keep him out. Instead of conceding defeat, Justice Department lawyers filed yet another motion last week, asking the Federal Court of Appeal to reconsider. The feds remain adamant that nothing should happen on the contentious file until the Supreme Court decides, once and for all, whether Vavilov is indeed a Canadian.

The high court has yet to announce whether it will weigh in on the matter, and is under no deadline to do so.

Vavilov was born in Toronto in 1994 as Alexander Philip Anthony Foley, the second son of a husband-and-wife team of deep-cover KGB agents who slipped into Canada during the Cold War and stole the identities of two dead babies from Montreal: Donald Howard Heathfield and Tracey Lee Ann Foley. Alex and his older brother, Timothy, spent their childhood oblivious to the fact that their parents’ real names were Andrey Bezrukov and Elena Vavilova, or that their mom and dad were prized assets of Russia’s foreign intelligence service. The boys were still young when the family moved to France, then Massachusetts—where, in 2010, the couple was arrested in a high-profile FBI raid that later inspired the hit TV series The Americans. Tim was 20 when his parents were exposed; Alex was 16.

After the bust made headlines around the world, immigration officials in Ottawa concluded that both brothers were never Canadian to begin with, despite being born here, because their parents were “employees in Canada of a foreign government,” a rare exception to the birthright rule under the Citizenship Act. Now Russian citizens who changed their last name to Vavilov, Alex and Tim have been battling in court to regain their Canadian status, arguing, among many other things, that they should not be punished for their parents’ espionage.

Though they lived abroad most of their lives, the brothers always travelled with Canadian passports and identified themselves as Canadians. “It is an integral part of my identity, the way others recognize me and is a recognition of certain values,” Alex told Maclean’slast year. “It is unacceptable that that the government may strip me of my rights just because it wants to.”

The feds appear especially eager to keep Tim, the eldest brother, from coming back. According to a report prepared by a senior immigration official, the Canadian Security Intelligence Service (CSIS) has told the government that Tim not only knew the truth about his parents’ double lives, but had pledged to join them—having been “sworn in” by the SVR, the KGB’s post-Soviet successor, before his mother and father were arrested.

Specific evidence to support that claim has never been revealed, and Tim, now 27, denies the accusation. “I am aware that there have been some media reports that my parents were ‘grooming’ me for espionage,” he wrote in one sworn affidavit. “These allegations are not true. It has been stated by the FBI that for over 10 years my home was bugged, however no evidence of my involvement has ever been presented.”…

via Son of Russian spies can travel home to Canada, judge rules – Macleans.ca

Mixed marriage kids face citizenship woes | Malaysia.

Not unique to Malaysia:

Thousands of families of mixed marriages in Sabah are faced with complexity in obtaining citizenship status for their children, according to Sabah People’s Basic Rights Association President Lee Pun Yee.

He said in most cases, the problem arises when local residents marry foreigners without the status of a legal marriage.

The future of their children will then be affected due to their (parents) shortcomings and negligence.

“Over the past two years since 2015, we personally received 50 such cases from local residents who marry foreigners from Indonesia, China and the Philippines,” he said here, Tuesday.

“Most of them legalise their marriage only after their children are born, but so far none have been able to get citizenship status for their children despite numerous applications to the relevant agency,” he said.

Lee, who was accompanied by his Secretary Tan Cheng Hwee and committee member, Chen Hing Hiong, said the association had tried to assist by sending letters three times to the Home Affairs Ministry over the past two years to consider the plight of these families.

“We sent the letters to the ministry’s secretary-general, we don’t know if the minister has received the letters or just too busy to be bothered.

“The children are innocent but aren’t able to enjoy the privilege of being Malaysians due to their non-citizenship status.

“We therefore hope the ministry will consider granting them citizenship as stipulated under Section 15A of the Federal Constitution which states that the Federal Government may, in such special circumstances as it thinks fit, cause any person under the age of 21 years to be registered as a citizen,” he said.

He said they will be sending another letter to the ministry, this time directly to Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamid, who is also Home Minister, soon.

“I plan to go there by end of February and hope to receive a response from the ministry,” he said.

He also said citizenship status should be granted to the children, citing 92 similar cases in Sarawak where citizenship under Section 15A of the Federal Constitution was granted.

“Why they can do it for Sarawak, but not for Sabahans?,” he questioned.

He also apologised to the 50 families for not being able to help them soonest when they approached the association for help two years ago.

“Most of them are businessman, some working in companies, some are farmers, while their wives are housewives.

“This problem will not only affect their children, but the future of their children’s kids and the generations to come if not addressed,” he said.

The issue have also been raised in May last year, with National Registration Department Sabah Director Dato Ismail Ahmad quoting as advising and reminding locals that marriage without valid registration can bring complexity to their children in terms of citizenship status, education and employment opportunity. – Sherell Jeffrey

via Mixed marriage kids face citizenship woes | Daily Express Newspaper Online, Sabah, Malaysia.

Trump tax reform leads U.S. entrepreneurs in Canada to consider giving up American citizenship

Interesting and complex. No hard handle on numbers potentially affected:

A growing number of American business owners in Canada are considering renouncing their U.S. citizenship following the recent overhaul of the U.S. tax system. The changes could mean a huge financial hit for some American business owners living abroad.

Some lawyers who specialize in helping Americans give up their U.S. citizenship are reporting a spike in interest from potential clients since the Trump administration’s Tax Cuts and Jobs Act was passed in late December.

“We have definitely seen an uptick” in outreach, said Alexander Marino, a U.S. tax lawyer at Calgary-based Moodys Gartner Tax Law, who heads the firm’s expatriation-practice group and specializes in U.S. citizenship renunciation.

While the U.S. tax changes – which include a cut in the corporate-tax rate to 21 per cent from 35 per cent – are considered good news for companies operating and doing business south of the border, U.S. citizens living and running privately held companies in other countries could face a one-time “transition tax” of up to 15.5 per cent. The retroactive tax is on corporate assets not taxed in the United States since 1986, which was the last time the country’s tax code was overhauled.

While it’s too late for Americans to give up their U.S. citizenship to avoid the transition tax, there is concern about a new annual tax, going forward, on assets of certain American-owned companies operating outside of the United States. The tax is on global, intangible low-taxed income and is known as the GILTI tax. It can be imposed on a U.S. citizen shareholder if, under the new law, more than 10-per-cent of the non-U.S. corporation’s earnings are deemed to come from intangible assets. The rules are very complicated and vary greatly in how they apply, “but have the potential to affect many Canadian-resident, U.S. citizens,” Mr. Marino said.

More than 230 people signed up for an information seminar on renunciation Mr. Marino’s firm held over the weekend in Toronto, which is more than double the attendance of their past events, even as the number of Americans revoking their citizenship has risen in recent years.

Citing data from the U.S. Internal Revenue Service’s Federal Register, Mr. Marino said 5,411 Americans worldwide renounced their citizenship in 2016, the highest annual number in the country’s history. That’s up 26 per cent from 4,279 in 2015 and nearly triple the 1,781 renouncers recorded in 2011. More Americans are giving up their U.S. citizenship amid stepped up enforcement of the Foreign Account Tax Compliance Act (FACTA), passed in 2010, which requires foreign financial institutions to report assets held by Americans living outside of the United States. It took effect in Canada in mid-2014.

For the first three months of 2017, the most recent data available the Federal Register list, 4,448 Americans surrendered their U.S. citizenship. When fourth-quarter results are released in the coming weeks, Mr. Marino expects it to be another record year for the number of Americans revoking their U.S. citizenship.

Max Reed, a cross-border tax lawyer with Vancouver-based SKL Tax, says his office has had nearly a dozen inquiries about renunciation since the tax changes passed about a month ago.

“Absolutely, we’ve had people who have started the process either because of the mandatory repatriation tax or the GILTI [tax],” Mr. Reed said. “Those new tax rules … will make life much more complicated and expensive for Americans in Canada.”

The downside of renunciation for some is no longer being able to easily move to or work in the United States, vote in U.S. elections or hold a U.S. passport. Some of the benefits include no longer having to file tax returns in more than one country, which saves time and money. Mr. Reed said there could also be other changes down the road that could make being an American citizen living outside of the United States more expensive. “Renouncing now insures against this risk,” he said.

There are U.S. rules governing renunciation. For instance, Americans looking to give up their U.S. citizenship must pay a fee of $2,350 (U.S.) and go through an in-person interview at a U.S. consul or embassy explaining why they wish to give up their passport.

They might also have to pay an “exit tax,” based on certain criteria. The exit tax can be triggered if an American citizen has a net worth of more than $2-million on the day they renounce, has an average net tax liability for the five preceding years of $165,000 (2018 amount adjusted for inflation) or if they haven’t met their U.S. tax obligations for the past five years.

With renunciation, there is also the risk of being banned from travelling to the United States under what’s known as the Reed Amendment (named after Rhode Island Democratic Senator Jack Reed). This can happen if the person renouncing is considered by the U.S. attorney-general to be “motivated by tax avoidance purposes,” according to the government.

While cases of renouncers being banned from the United States are rare, Mr. Marino said it’s a risk. “Professional advice, if you decide to renounce, is always recommended to avoid the exit tax, to get ready for the interview, or to not be barred,” from the United States, he said.

via Trump tax reform leads U.S. entrepreneurs in Canada to consider giving up American citizenship – The Globe and Mail

Australia: Road to citizenship gets longer for ‘demonised’ applicants

Australia generally has had a better track record than Canada in processing times with short processing times and limited backlogs:

An 18-month investigation by the Commonwealth Ombudsman, released in December, found the number of people subject to heightened identity checks and waiting more than two years on the outcome of a “citizenship by conferral” application – such as former refugees – had skyrocketed 450 per cent.

This increase – a jump from 338 cases requiring enhanced screening in November 2016 to almost 2000 by the middle of last year – was despite an overall drop in the number of complex applications awaiting a decision, the ombudsman found.

As of early January, there were 167,820 outstanding conferral applications, 5680 of which were more than two years old.

The ombudsman’s investigation focused on those subject to “enhanced screening and integrity checks” due to background factors such as country of origin, an “irregular” arrival or due to any changes made to personal information.

The oldest of these case had been “on hand” for more than four years, according to the report. This compared to the department’s “service standard” for processing most cases of just 80 days.

“In early 2016, the Commonwealth Ombudsman started to experience an increase in complaints from people awaiting decisions on their citizenship applications for more than a year, and sometimes over two years,” the December report said.

“In the past year and a half, we have received approximately 300 complaints about delays by the department.”

‘Enhanced’ identity checks

Applicants from Afghanistan topped the list of those facing delays, the ombudsman found, noting those hailing from the war-torn nation had been singled out by the department as a particular caseload with “integrity issues”.

A finding from the ‘Delays in processing of applications for Australian Citizenship by conferral’ 2017 report.
Commonwealth Ombudsman

“Although the department has made progress in reducing the overall backlog of applications, its assessment of more complex cases is still an area for improvement,” the report said.

But critics say the delay is part of a deliberate policy shift that “demonised” those from refugee backgrounds and exacerbated problems caused by inadequate staffing.

“It doesn’t make sense that the department is satisfied with someone’s identity to grant them a permanent visa so they can stay in Australia for their whole life, yet when it comes to citizenship they have no idea about their identity,” the Refugee Council of Australia’s Asher Hirsch said.

Refugee community ‘demonised’

Mr Hirsch said beyond denying many refugees a sense of belonging and security, the citizenship delay effectively halted bids by some to see their loved ones. According to a 2014 ministerial directive, boat arrivals are given the lowest processing priority for family reunification visas.

The ombudsman recommended the department work on improvements to its processes to help it meet the “various challenges” of its caseload.

A 2016 Federal Court case brought by two Afghan men that found it should have reasonably taken between six and seven months to process their cases was “important guidance” for the department, the report said.

The department denied there was a backlog or delay in processing citizenship applications, and noted that Australia has “non-discriminatory migration and citizenship programs”.

“Applicants for Australian Citizenship must meet the legislative criteria, regardless of how and when they arrive in Australia,” the department said in a statement.

“The department has a duty to thoroughly assess the genuine nature of all citizenship applications.”

The report acknowledged the department’s concerns:

“In recent years, the increased awareness of identity fraud and the increased focus on ensuring the applicant is who they say they are before they are granted citizenship, has most likely caused decision-makers to take more time with high-risk applications,” it said.

“The department is acutely conscious of the fact that after a person has been approved for citizenship, it is difficult to cancel it later if it is determined the person has lied about their identity.”

via Road to citizenship gets longer for ‘demonised’ applicants

How to fix Canada’s ‘Ghost Immigrant’ fraud problem: David Lesperance

Worth considering and more analysis: replacing the physical presence residency requirement with a tax residence requirement.

In a more globalized world, where people are more mobile and where Canada tries to attract highly skilled and thus mobile immigrants, this may be appropriate test.

Look forward to reader reactions.:

As has been widely reported, Canada is experiencing an influx of wealthy “Ghost Immigrants” who are securing permanent residence, purchasing properties in Canada, and then returning to their home countries. Unfortunately, a large number of them are not paying anywhere near their legal worldwide tax obligation to Canada, yet are fraudulently claiming to meet the physical presence requirement of maintaining permanent residence and qualifying for citizenship as well as reaping the many other benefits of Canadian life.

There are a number of lessons that Canadians and their government can learn from the Fu v. Zhu case:

1. The problem is widespread

Dodging taxes is not an uncommon thing for people to try to do. What’s unusual in this case is that these individuals chose to expose themselves rather than having been uncovered by an investigation. This is the dumb end of the spectrum of fraudulent behaviour. This same dumb end is occupied by dozens of applicants who used the same address or hundreds of immigrants who hired the same notorious firm to engage in assembly line, cookie cutter fraud.

2. It’s not a new problem

Fraudulently claiming to be physically present in Canada is a scam dating back decades. In 1991 I presented a “Scoundrel’s Guide to Circumventing the Canadian Immigration and Citizenship Act,” to the Federal Parliamentary Immigration Subcommittee. This guide described many of these very same methods to circumvent the physical presence requirements of maintaining permanent residence and qualifying for citizenship. In our current social media world, these same techniques would work just as effectively. At the same time I presented my guide, the newspapers were focused on a high profile case regarding Toronto lawyer Martin Pilzmaker who promoted these same schemes during the 1980’s.

3. Tighter border controls aren’t the answer

Canada Border Service investigations require enormous resources. Investigations to date uncovered only the most unsophisticated and lazy offenders, with the consequences usually being only a minor fine and a suspended sentence. In reality it would take massive investigative resources to even attempt to catch the smarter physical presence frauds. If there were an increased investigative push, rest assured that all would migrate to the more sophisticated hard-to-detect techniques. Therefore, throwing ever greater sums of money at CBS investigations of the current physical presence law is a waste of time and not in Canadian taxpayers’ best interest.

4. Audits would work better

Successful audits by CRA are revenue generators. The reality is that the CRA has not been enforcing worldwide taxation and this news has spread throughout the immigrant community. In a 1996 report, the CRA claimed that it was simply too difficult to audit these cases in the first place and to collect the taxes owed.

However over the last two decades there have been some significant changes which render this viewpoint obsolete:

  1. Data-mining techniques that allow cross-referencing of employment/business and asset information that the immigrant supplied to Canadian immigration officials when applying for status with their later claimed worldwide income;
  2. Canada signing a tax treaty (with an exchange of information clause) with Hong Kong in 2012;
  3. Even though Canada has had a tax treaty with China since 1986, the recent anti-corruption movement within China means that this treaty has gained significant potential usefulness to the CRA in the last few years;
  4. CRA introducing a Whistleblower program in 2013  in response to the dramatically increased international importance of whistleblowers to tax evasion collections starting in the mid 2000’s. This means that there are now a multitude of potential informants (in banks, accounting, real estate firms etc.) who can and will supply financial information on tax evasion;
  5. Social media and on-line information make lifestyle audits easier and more accurate, especially with today’s computing power compared to 1996; and
  6. Canadian assets (namely highly inflated real estate in Canada) have increased significantly, which means that there are now significant seizable assets within the easy reach of the CRA.

Given these changes it is now in the Canadian taxpayers’ best interest to increase tax audits in this area. This would send shock waves through the hearts of those engaging in fraudulent behaviour. This effort does not require any legislative change… simply a refocus by the CRA of its resources.

The second equally important action would be to replace the current unenforceable physical presence requirement in Canadian immigration and citizenship law. In the future, “tax residence” should be the criteria for maintaining permanent residence and fulfilling naturalization requirements for citizenship.  This action can possibly be done at the Ministerial level under the power granted under the Immigration and Refugee Protection Act, as opposed to requiring a parliamentary vote.

The immediate impact of these combined efforts would mean that current (and future) immigrants will be forced to make a clear choice. If they wish to maintain their permanent residence status or qualify for citizenship, they will need to declare themselves Canadian tax residents and pay full Canadian tax on their worldwide income. If they try to under-report the amount of their worldwide income, then their case will immediately be audited by CRA. If CRA finds they have engaged in tax evasion, they will suffer the double whammy of tax evasion and also being stripped of their immigration status or denied citizenship, because of fraud. All family members who engaged or assisted in this fraud would suffer a similar fate.

As a result of these changes a large number of people who are currently gaming the system will realize that there will be a real chance that they will be exposed to the full brunt of Canadian taxation. They will then decide that permanent residence status or citizenship is not worth that price and voluntarily relinquish immigration status. Furthermore, under Canadian law they will be required to sell their Canadian residential property to an unrelated arms length party, in order to make themselves clearly non-resident in Canada for tax purposes. This will have a significant impact on an over-inflated real estate market when these properties go up for sale.

If this is so logical, why hasn’t Canada done this before? This same proposal is basically the same one I made over a quarter of a century ago in that hearing room on Parliament Hill. The reason that it was not adopted then, and hasn’t been adopted since, is that Canadian politicians and voters have a lovely but unrealistic sentiment that new immigrants and new citizens should be physically present in Canada, rubbing elbows at Canadian Tire and Tim Hortons. According to this mythology, in this way these newcomers magically become “Canadianized.”

In reality, becoming “Canadianized” is a choice people make, not an automatic natural result of being physically present in Canada. There are plenty of immigrants who are long-time Canadian residents who are not much engaged with their neighbours; there are plenty of others who do not live within Canada’s borders but who maintain deep connections to broader Canadian society. (I still vividly remember greeting a client and his family when they landed in Canada for the first time after moving from Dubai. Their 8 year old son immediately started quizzing me about the Toronto Maple Leafs, as he had spent the last two years watching every game and reading about Toronto sports teams. He was quite disappointed to discover that, having grown up in Windsor, I was a Red Wings fan.) Being physically located within Canada’s borders has, in reality, remarkably little to do with genuine citizenship.

Furthermore, it has always been, and will continue to be, extremely expensive and intrusive to enforce physical presence rules, with little actual benefit. At a minimum, increased enforcement would mean massive disruption for all Canadians, since measures such as exit controls would be required. This would further inconvenience the Canadian traveling public, while having no appreciable impact on fraud reduction.

Another benefit of replacing physical presence with a tax residency regime is that Canada will suddenly become attractive to a large number of international entrepreneurs who, as a result of their normal business travel, would never meet the current physical presence requirements and are not willing to engage in fraudulent behaviour. However, they would be willing to trade their current tax situation for the favourable one that Canada offers. Canada’s lack of estate, gift or wealth taxes makes us very attractive to American and European businesspeople who are currently exposed to these taxes in their home country.

Without a doubt, becoming “Canadianized” is a worthwhile requirement to maintain immigrant status and qualify for citizenship. However, I would argue that making sure that a) the individual pays their fair share of taxes; and b) knows the history, culture, social norms and legal obligations of Canadians (through a more rigorous Citizenship test) are more effective and efficient ways of ensuring that they fulfill this requirement than the current, easily-circumvented and ineffective physical presence regime.

Source: How to fix Canada’s ‘Ghost Immigrant’ fraud problem