Economic citizenship due diligence issues extend beyond the Caribbean



By Caribbean News Now contributor

TORONTO, Canada — An alert generated on Saturday, July 1, by the regional advance passenger information system (APIS) in relation to a Chinese national with a St Kitts and Nevis passport departing from Canada and transiting through Antigua en route to St Kitts has raised questions about the integrity of Canada’s investor visa programme.

Xianbin Li (49) was identified by the alert as the subject of an active arrest warrant in China for fraudulently obtaining bank loans and embezzling money from his own businesses totaling US20 million.

His US visa has reportedly been revoked and he was denied a replacement visa; however, he has landed residency in Canada through an investor visa. He also owns a company that is known to facilitate the immigration of other Chinese citizens to Canada.

In accordance with standard requirements, Xianbin Li was interviewed on arrival in Antigua and subjected to a comprehensive baggage inspection. However, since he was traveling on a St Kitts and Nevis passport, he was allowed to proceed to Basseterre.

With this incident coming shortly after the withdrawal of visa-free entry to Canada for nationals of Antigua and Barbuda, apparently because of concerns over its economic citizenship programme, questions have been asked about the effectiveness of due diligence conducted by Canada in relation to its own investor visa programme.

As pointed out by regional officials, “Canada’s residency programme has allowed an alleged criminal embezzler to enter and remain and also to travel freely.”

In response to a request to address the apparent hypocrisy on the part of the Canadian government in penalising Caribbean countries for a purported failure of integrity and/or due diligence in their economic citizenship programs, while at the same time failing to apply an adequate level of due diligence and/or supervision to its own investor visa programme, Nancy Chan, communications advisor with Immigration, Refugees and Citizenship Canada (IRCC), noted that Canada stopped accepting applications under its Federal Immigrant Investor Program (IIP) on July 1, 2012 and that the program was terminated in 2014.

“Every person who applied to immigrate to Canada under the Federal IIP underwent security checks and medical exams. This is the case for everyone who wishes to obtain permanent resident status in Canada,” Chan said.

She explained that IRCC takes fraud seriously and conducts regular integrity reviews of the application it receives. When evidence of suspected fraudulent activity is found, IRCC launches an investigation which may result in any of the following:

• loss of Canadian immigration status;
• loss of citizenship; or
• refusal and/or revocation of Canadian passports

“IRCC cooperates with law enforcement in any resulting criminal investigation,” Chan said.

According to US government sources, following this latest incident, their Canadian counterparts will be proposing a complete review of all citizenship and residency grants going back at least five and possibly ten years.

In the meantime, the Quebec immigrant investor programme (QIIP) first established in 1998, which offers qualified high net worth individuals and families worldwide the opportunity to immigrate to Canada through the Province of Quebec, reopened for new applications from May 29, 2017 until February 23, 2018. The programme will accept a maximum of 1,900 applications during this limited intake period.

In order to be admitted into the current iteration of the QIIP, foreign investors must have a legally obtained minimum net worth of CAD$1.6 million (US$1.2 million), either individually or combined with their spouse or partner.

Applicants for investor immigration must agree to make a government guaranteed CAD$800,000 (US$618,000) investment in Quebec. This prescribed investment in a five-year term note is fully and unconditionally guaranteed by the government of Quebec, and the money is returned in full after five years with no interest.

However, investors who do not wish to liquidate assets in order to come up with the required CAD$800,000 can finance the investment through an authorized Canadian financial intermediary for a one-time loan payment of CAD$220,000, which includes all interest and fees. This means that, as of July 2017, the "true cost" of obtaining a Canadian investor visa is only US$170,000 depending on the exchange rate.

Individuals and families that immigrate to Canada by way of Quebec investor visa can eventually obtain Canadian citizenship after living in the country for four years.

Asked how the closure of the federal IIP in 2012/2014 ties in with the reopening in May of the QIIP for new applications, which appears to represent an equivalent path to Canadian residency and citizenship, IRCC said that the former federal programme and Quebec’s immigrant investor programme are not related in any way.

“Under the Canada-Quebec Accord, Quebec has the sole authority for selecting immigrants to its province. The Immigration and Refugee Protection Act and the Canada-Quebec Accord both clearly state that Quebec’s authority is to select immigrants who will settle in Quebec,” Chan explained.

IRCC declined to state whether Xianbin Li – the individual with a Canadian investor visa flagged when travelling through Antigua to St Kitts – obtained such investor visa under the former federal programme or the current Quebec programme.

“Due to privacy laws, IRCC cannot provide details of individual cases or provide information about investigations and other follow-up actions,” Chan said.

Meanwhile, although this is the second time in recent months that the issue of a fugitive Chinese national holding a St Kitts and Nevis passport has arisen, the Prime Minister’s Office in Basseterre said, “The St Kitts-Nevis government will not be issuing any response or statement on this matter.”

Ren Biao, who is accused of the theft of more than US$100 million in China and wanted by the Chinese government, is still in St Kitts and Nevis, reportedly awaiting a federation passport that he submitted for renewal.

The question of due diligence in relation to applicants for citizenship and/or residence also achieved new prominence in Britain this week with a new media report.

In Britain from 2008 to 2015 – now referred to as the “blind faith period” by anti-corruption campaigners – some 3,000 wealthy foreigners invested up to £3 billion (US$3.9 billion) in the UK in exchange for residency, leading eventually to British citizenship, the Guardian newspaper reported on Tuesday.

However, the Home Office assumed that the banks handling the money had done due diligence on their customers and the banks assumed that the government had conducted the necessary due diligence on the visa applicants.

The end result? Little or no due diligence was ever done.

“About 3,000 individuals came through in that period. We are completely in the dark about the extent to which the UK government actually knew who these people were and where their money was coming from,” said Naomi Hirst, a senior campaigner at the anti-corruption group Global Witness.

The Home Office did not dispute that its former due diligence requirements during the blind faith period had been insufficient. In a statement a spokesperson said: “We carry out a range of robust checks on all those applying for these visas – and banks are required to carry out their own due diligence on all applicants.”

Other European Union countries, including Malta, Cyprus and Portugal, also offer similar residency/citizenship schemes, with varying terms. Under a law passed in late 2013, Malta began selling EU passports for €650,000 (US$742,000).

New citizens must meet a “residence requirement”, which requires evidence of a genuine link with Malta and applicants must commit to retain a residence in Malta for a period of at least five years. Citizenship is granted to approved individuals and families who have held resident status in Malta for a period of 12 months.

However, according to one industry insider, prospective citizens are assured by Maltese government officials that the residence requirement is not rigorously enforced and they can expect their new passport at the end of the 12-month period regardless.

A “consultant” reportedly involved at one time with the Malta citizenship program was an influential Maltese-Indian businessman with questionable connections and blacklisted by the World Bank, who was also the rumoured election “fixer” at the 2015 Commonwealth Heads of Government Meeting (CHOGM) in Malta, at which Baroness Patricia Scotland was narrowly elected as the new Commonwealth secretary general.

In 2013, one Malta blogger called on the island’s secret/security services to open files on “the shady characters from the former USSR, African dictatorships and China who will be sold EU citizenship via a Maltese passport, through his good offices”.

The US EB-5 visa also grants residency leading to citizenship in exchange for a $500,000 investment in any business that will create at least ten jobs in approved areas.

President Donald Trump’s son-in-law Jared Kushner’s former company was recently exposed promoting EB-5 visas in China touting the Trump/Kushner, raising questions as to potential White House influence in granting such visas, especially since it was reported last week that Trump was not above offering to use his connections to quash a story in the supermarket tabloid National Enquirer in return for an apology from MSNBC’s Morning Joe hosts, who in response said that Trump “is not mentally equipped to continue watching our show”.



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