Sunday, December 7, 2014


By the huge number of hits I have seen on my blog, following the article on the revocation of visa-free travel privileges, by Canada, for St. Kitts passports holders, it appears that there is bona fide compliance concern about the level of increased risk posed by prospective bank clients, who arrive with passports obtained through investment programs of Caribbean countries. They could be originally from high-risk jurisdictions, from countries that are state sponsors of terrorism, or even OFAC-sanctioned nations.

As a risk-based compliance program is the generally-accepted benchmark, how are we to treat nationals from the Caribbean jurisdictions where such economic citizenship programs are operational ? They include, in addition to St. Kitts:

(1) Grenada
(2) Antigua & Barbuda
(3) Belize
(4) Dominica

Economic passport holders are in a higher level of risk than nationals from those jurisdictions, who achieve citizenship through birth, of by having parents who are themselves citizens, since they could have dark motives for possessing a new identity document from another country:

(A) Felony convictions in their country or origin, or elsewhere. In their new nationality, a search of  local government databases will not turn up a criminal record, should your bank inquire, and there is no comprehensive international database of criminal convictions, available to persons who are nor sworn law enforcement officers.

(B) The ability to take on a totally new name. Former names were curiously (intentionally?) omitted from the St. Kitts e-passports, and that is probably one of the major reasons Canada acted.

(C) Place of Birth can be omitted or changed. This is the second reason that I believe that Canada properly revoked visa-free status for St. Kitts. A foreign place of birth on a passport is a red flag, and raises concerns about whether the holder was originally a national of another jurisdiction.

(D) Corruption, on the part of the individuals, or agency, processing the applications, could result in a completely new identity, untraceable and with no arrest record, or other baggage, to inform immigration officers, or bankers. This is an even more possible issue, when the application work is outsourced, where it will have little or no governmental oversight.

Should you be concerned, when a Caucasian arrives at your bank, from a country which is 100% of African descent ? Absolutely; it is time for enhanced due diligence, and no funds should be accepted, or transferred, in any manner, until you rule out the client as an unacceptable risk. Given that Russians, Iranians, and individuals from sundry other high-risk Middle Eastern countries are now known to have purchased economic citizenship in the Caribbean,  you should alert your compliance staff to the increased dangers.


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