WEALTHY AMERICANS BUY ECONOMIC PASSPORTS AT THEIR PERIL

Articles which have have recently appeared, advising affluent American citizens of the advantages of acquiring economic (CBI) passports, due to the perfect storm of the strong US Dollar and the dangers of domestic political right wing instability that verges on domestic terrorism, are extremely troubling, for these stories fail to disclose important legal considerations that any Americans who purchase an economic passport must address, lest they later find themselves in a difficult situation not contemplated in their acquisition. Whilst the threat of political violence in upcoming national elections concerns everybody, relocating abroad, on the strength of an economic passport/citizenship scheme, could create far more serious problems than it solves.

First of all, international citizenship consultancies are recommending Malta's IIU passport programme, as the doorway to enter the countries of the European Union, visa-free. Prospective purchasers should be aware that Malta is the only CBI jurisdiction left in the EU, due to the fact that the European Commission, which opposes any economic passport scheme where the recipient does not actually reside there, has driven both Cyprus and Bulgaria out of the business, and is in the process of suing Malta to terminate, with prejudice, its IIM programme, as being inconsistent with European values. Do American applicants really want to be the last one to purchase such citizenships, when the programme itself is endangered? 

Second, Malta's sordid reputation as a major money laundering centre could rub off on future passport holders, making innocent people targets of international law enforcement attention; do you want to be possibly interrogated last length at international airports during travel, with your possessions searched, and you become a Person of Interest to Western law enforcement agencies? Buying a passport from the five East Caribbean states that offer this service is often even worse, when it comes to drawing unwanted attention from law enforcement agencies in North America concerned about money laundering.

Third, unless the American applicant goes through the lengthy, (and expensive taxwise) legal process of  renouncing their American citizenship, there is the FATCA reporting nightmare, which often results in Americans abroad being unable to open a foreign bank account, because local banks do not want the accounting expenses of constant reporting of their Americans' financial transactions. Why live abroad if you cannot bank there?

Strangely, most CBI consultancies fail to mention any of the above drawbacks; they actually do not provide legal advice at all, but cleverly hold themselves out as "legal experts," and not your lawyer. Most of the time, they are not even admitted to the practise of law, in the jurisdictions that they are selling you the passports. Many are not lawyers at all just commission salesmen vending their wares, and applicants are not advised to retain. their own counsel to review the offers presented in such a grand manner, claiming to be there ultimate solution to the problems of wealthy individuals seeking a safe haven abroad.

Therefore, we hope that affluent Americans, who are looking for solutions, look elsewhere to solve their problems, lest they find they have bitten off far more legal problems than they can comfortably chew.