THE UK TELLS ITS FORMER EAST CARIBBEAN TERRITORIES TO REFORM THEIR RUNAWAY CBI PASSPORT PROGRAMMES

If you, like us, were wondering why the Federation of St. Christopher and Nevis, more commonly known as St. Kitts**, recently enacted major reforms of its freewheeling Citizenship by Investment (CBI/CIP) economic passport sales programme, there's a reason. Though there has not been any official announcement, it is generally understood that the United Kingdom has specifically expressed its expectation that a number of reform must occur amongst the surviving four East Caribbean states* whose citizens still enjoy visa-free entry there.

Failure to comply with the "request" definitely has possible adverse consequences. The fact that the Commonwealth of Dominica, one of the CBI states, has recently lost its visa-free access, which is the centerpiece of the attractiveness of CBI passports purchased from those Commonwealth Members who sell them, has got the attention of governments which previously ignored calls for reform, as they continued the lucrative practice of selling passports to undesirable applicants. Things have now changed, however, as the golden goose of US Dollars, sent in by applicants from Russia, Iran, Syria, China and yes even North Korea, is in danger of flying away.

What are the reforms? Here are the important ones:

(1) Perform Enhanced Due Diligence on all applicants.

(2) Insure that all applicants actually have an interview with the agency that processes the applications.

(3) Require all applicants to physically retrieve their passports in the jurisdiction that issues them.

There are others, but these requirements elevate the passport/citizenship application process to the level of Best Practises, and should go a long way towards eliminating the abuse of these programmes all of which have spawned the facilitation of transnational financial crime, international sanctions evasion, and in some cases, terrorist financing. The UK is now saying that it has to stop, or the precious visa-free access will be, like Dominica, be rescinded, which causes legitimate West Indians from those jurisdictions the expense and delay of visa application, interviews, and costs that they have previously avoided, due to their Commonwealth status.

We trust that the other EC CBI states will now follow suit. Our sources confirm that there is fear and loathing in Antigua & Barbuda, notwithstanding protests from its PM sounding suspiciously like anti-Colonialism propaganda. Of course, the next question we have is when they will be receiving a similar letter over in the Republic of Malta, the only surviving EU Member still selling economic passports to all comers. Our advice to the UK Home Secretary: don't delay, please.

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* Antigua & Barbuda, St. Kitts and Nevis, St. Lucia and Grenada. 

**The government of St. Kitts and Nevis has announced several changes to the Citizenship by Investment (CBI) Program, intended to boost investor confidence in the program and bolster the country’s reputation. The changes include a new Sustainable Island State Contribution (SISC) investment option for foreign nationals investing at least USD 250,000 (or USD 300,000 for a family of two or USD 350,000 for a family of three and four) to help advance St. Kitts and Nevis into a sustainable island state; namely, to increase local food production; transition to green energy; diversify the economy; attract and support sustainable industries; evolve the creative economy; recover from the impact of the COVID-19 pandemic; and expand social protection. The program replaces the previous Sustainable Growth Fund option which had a minimum investment threshold of USD 125,000 for a main applicant, half the amount required under the new SISC. Another change includes that all investors applying for CBI are now required to undergo an interview and background due diligence checks conducted by independent professional firms based in the United Kingdom, United States, or the European Union, commissioned by the government of St. Kitts and Nevis. Previously, this was not required. Other changes include limitations on the methods by which the CBI program can be advertised internationally.