Dominican Today -
Governments in North America and Europe
are beginning to look more closely at citizenship for investment schemes, after
a small but growing number of incidents have raised concerns about who
passports are being issued to.
Although much of the media have confused
the illegal issue of diplomatic or regular passports with those provided under legal
citizenship by investment programmes that many nations operate, it is clear
that the whole question of being able, in one or another way, to offer
citizenship without a residence requirement is coming under increasing international
scrutiny; with the real danger being that ordinary citizens may come to face
blanket requirements for visas where none previously existed.
Citizenship for investment schemes, of which
there are globally very many on offer, provide passports in return for payments
or investments of between US$0. 1m and US$1m and requirements that range from
the challenging to the simple or non-existent regarding residence.
Among those most interested in such
provisions are newly wealthy Chinese entrepreneurs whose interest in holding
alternative citizenship, or residing elsewhere, relates to unspoken concerns
about their Government’s anti-corruption drive, personal freedom, or seeking a
location that provides an international education for their children.
Wealthy Russians too have an interest in relocating as do a growing number of wealthy citizens from the Middle East, the
former Soviet Republics and Africa unsettled by
instability and war, and US entrepreneurs who want to escape
the US’s ever widening tax net.
problem is that such schemes, the nature of the due diligence undertaken in
granting citizenship, and in some cases those who are appointed to sell such
schemes globally, have become controversial.
The latest nation to attract attention
is Malta, a full member of European Union where its government recently announced
a scheme that in effect sells citizenship of the EU in the form of a Maltese
passport. Government there had proposed that citizenship would be available for
US$890,000 (Euro 650,000) without any residency or
investment requirement and without the names of those granted citizenship being
the proposal, which the Maltese government had predicted would bring in US$ 41m
(Euro 30m) resulted in a domestic political storm. It also resulted in concern being
expressed by other EU member states as the effect would have been to offer
entrance and residency into the other 27 EU member states. The result was the
temporary suspension of the programme, a debate in the European Parliament next
month, and pressure from a number of member states for consistency across the
In the Caribbean, the revenue raising
potential such schemes have understandably become of particular interest to
some of the region’s smaller heavily indebted nations.
Earlier this month Grenada became the latest
Government to announce a citizenship programme as one of a number of decisions to try to put the nation’s
fiscal house in order. In his budget address the Prime
Minister, Keith Mitchell, announced that he will bring before parliament in early 2014 a new citizenship
by investment programme tailored to Grenada’s needs, which
will, he said, take great care to attract clean and credible investors. This programme
will be under the control of a Committee led by the Attorney General which will
receive and determine applications for a programme conservatively estimated to
bring in US$10m (EC$27m) in 2014.
Antigua has a similar a scheme, as do
Dominica and St Kitts-Nevis which offer investment variations on citizenship
without a residency requirement. More recently, British overseas territories have been told by London they
may only consider programmes for residence as long as there is no guarantee of
In contrast, St Vincent has said that it
will not follow other OECS nations. Speaking about this in August, the
islands’ Prime Minister, Dr Ralph Gonsalves, said “I know what the downsides
are, and I insist that the highest office in the land is that of citizen and it
is not for sale. . . . the passport is the outward sign of the inward grace of
citizenship and it is not for sale either”. Mr Gonsalves said that instead he
preferred to see citizenship garmented to those who “come in and they invest
and later on“ [become citizens].
Citizenship programmes are
extraterritorial in their effect, so the offer of an OECS passport potentially provides
any new citizen with the ability to move freely within the region and in some
cases beyond, to the Schengen area, to Canada, or to other parts of the world
that do not as yet require visas from citizens of certain Caribbean
Not only is this creating unease within
some Caricom countries and the suggestion that there is a need to examine the implications
in relation to free movement and national security, but it is also clear that
traditional partners are watching closely the development of such programmes.
Recent private research also suggests
that concern among Caribbean citizens has been growing. Among the doubts listed
about economic citizenship programmes are: a country being associated with
criminals; being inundated with foreigners; funding being given by foreigners
to political parties or individuals rather than the state; damage to
international reputation; and visa restrictions being applied to all nationals
by other states.
Assuring the Caribbean people that they
will not suffer visa restrictions from other nations as a result of an economic
citizenship programme is an issue that has domestic political implications. It
requires any Government envisaging such programmes to ensure that they
communicate their plans to those countries that it citizens most frequently
travel to and develop clear procedures in relation to security and the
administration of their scheme.
As international views on monitoring
money laundering and transparency evolve, it is possible that economic
citizenship could at some point become the subject of more intense scrutiny by
external governments and international institutions.
In its desire to create new sources of
income, Caribbean nations and the region should consider carefully the
implications and reputational risks. If economic citizenship, without any
significant residence requirement or the most detailed and exhaustive of
checks, were to be proved to have facilitated criminality or terrorism, the
measure will not only have become self-defeating for the country concerned, but
also potentially damaging to the region as a whole.
David Jessop is the Director of the
Caribbean Council and can be contacted at david. jessop@caribbean-council. org
Previous columns can be found at www. caribbean-council. org
Read original at Dominican Today.