RUSSIANS WIELDING CBI PASSPORTS TO CONCEAL THEIR NATIONALITY POSE A CHALLENGE FOR COMPLIANCE OFFICERS DUE TO POTENTIAL SANCTIONS VIOLATIONS

Visa-free access to the United Kingdom and to the Members of the European Union, by Russian nationals is not new; Russians have employed Maltese IIM (CBI) passports to enter Europe without scrutiny for many years, whether to engage in money laundering or fraud, or to place illicit wealth out of the reach of their own government, Russians have long used CBI passports to access European financial institutions.

However, since the invasion of the Ukraine, and the resulting widespread imposition of Western sanctions, we have seen Russian nationals gravitate towards securing Caribbean Citizenship by Investment (CBI/CIP) passports to ease their entry into Europe. Some Russians have even become stakeholders or developers, as well as passport holders such as we have seen in Grenada, but others have chosen to change their nationalities through CBI passports obtained in Dominica, Saint Kitts & Nevis, Saint Lucia and Antigua & Barbuda.

Compliance officers in jurisdictions that have major sanctions regimes in place are faced with a difficult task; making certain that each Caribbean passport holders, for a CBI-issuing country is not, in truth and in fact, a Russian, and therefore potentially subject to being a threat as a sanctions violation for the bank which chooses to onboard him or her. Given that one can often acquire a CBI passport under an alias, with a bogus date and place of birth, the task of identifying the client becomes extremely difficult, given the usual pressures from New Accounts to approve a possibly affluent new client bringing business to the bank.

I hate to be the one to suggest profiling new customers, but any obviously not native-born West Indian who is presenting a passport from one of the five Eastern Caribbean CBI or CIp states must be subject to strict enhanced due diligence, to rule out Russian or Belarusian nationality. To do anything less means that you are possibly onboarding a sanctions violation in progress, Compliance officers: Be careful out there.