Friday, August 5, 2016


Nations in the West Indies, whose governments have elected to engage in citizenship-by-investment programs, more commonly known as economic passports, and those which will engage in such programs in the future, present complex problems for compliance officers, both in North America and the countries of Europe. Unfortunately, compliance must face the fact that these programs are going to be a permanent fixture in the region, and that we must adapt our Know Your Customer risk-based compliance programs accordingly.

Remember, there are several sound economic reasons put forth, to justify these programs. Many of the citizens of the independent countries of the West Indies simply do not generate sufficient tax revenue to maintain government, renew infrastructure, and improve institutions that affect quality of life. Additional income, in the absence of nonexistent foreign aid, and direct investment, has to come from somewhere.

Of course, given that we accept economic passports does not mean that we do not adjust compliance to cope with them. We carefully check place of birth on prospective bank clients from those countries, to see whether the holder might have purchased his nationality or passport. We listen to his accent, his choice of language, his slang, all to determine whether he might just originally be from a high-risk jurisdiction, and subject to enhanced due diligence.

If he has a special category of passport, we check to verify that he actually holds such a position, and it is not just a paper title. We also check a little to verify that the passport is indeed genuine.

We can deal with economic passports; we just need to stay alert, and be sensitive to the indicia, the telltale signs, that the new client in front of you is holding one.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.