Golding Report on CARICOM highlights dangers in citizenship by investment programmes

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By Youri Kemp
Caribbean News Now associate editor
[email protected]

KINGSTON, Jamaica — In its detailed “Report of the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks”, the committee headed by former Jamaican prime minister, Bruce Golding, was concerned about the way in which citizenship by investment programmes (CIP) were not being monitored throughout the region.

The report’s recommendations asks the Caribbean Community (CARICOM) to: “Establish an agreed framework with appropriate protocols and safeguards regarding the terms, conditions, qualifications and restrictions in relation to the operation of citizenship by investment programmes including prior consultations or sharing of information with other member states.”

The recommendation was based on findings by the Golding Commission, which criticised the CIP practice, calling it “citizenship for sale”, driven by immediate investments rather than having a long term strategy.

The Golding Report is also concerned about the vulnerability to abuses of the programmes, and stated that “Caribbean citizenship is highly sought after because it is relatively cheap, quick and uncomplicated and can afford the holder visa free entry to as many as 132 countries, including the UK, Canada and the countries of the Schengen area.”

Along with several arrests of persons traveling through the Caribbean to larger, developed markets in Canada and the USA, high-profile and persons of concern have also showed up on the radar having separate passports under the different country variations for these programmes.

Current White House chief of staff, General John Kelly, back in March 2015, said in a presentation before the US Senate’s Armed Services Committee, that “cash for passports” programmes were among the security threats faced by the US saying they “could be exploited by criminals, terrorists or other nefarious actors.”

According to an advisory issued in May 2014 by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) and still in force, foreign individuals were abusing the St Kitts and Nevis CIP to obtain passports for the purpose of engaging in illicit financial activity.

Specifically, FinCEN believes that illicit actors are abusing the St Kitts and Nevis programme to acquire citizenship in order to mask their identity and geographic background for the purpose of evading US or international sanctions or engaging in other financial crime.

For example, FinCEN said that several Iranian nationals designated by the Office of Foreign Assets Control (OFAC) obtained passports issued through the St Kitts and Nevis CBI programme.

In particular, FinCEN advised that US financial institutions should conduct risk-based customer due diligence to mitigate the risk that a customer is disguising his or her identity with an St Kitts and Nevis passport in order to evade sanctions or engage in other financial crime.

In its 2017 International Narcotics Control Strategy Report, the U.S. State Department also directly warned Antigua and Barbuda’s CIP could be susceptible to money laundering and other financial crimes.

The Golding Report acknowledged concerns from the USA, Canada and EU and other OECD countries over the abuse of the programme, notwithstanding the contributions of 20 percent and up to 35 percent of total revenues of CIP operating countries.

Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and Saint Lucia all have CIPs. The Bahamas passed into a Commercial Enterprise Bill that fast-tracks work permits for persons seeking to invest over $250,000 in the country through foreign direct investment. Belize suspended its CIP in 2002 after much controversy.

CIP consultants in the Caribbean, most notably Henley & Partners, have also come under fire for facilitating the issue of questionable passports without any oversight, causing greater concerns that the industry is more structured as a business model, but without firm regional or governmental standardized practice to facilitate these arrangements.

According to its website, Henley and Partners manages programmes in Antigua and Barbuda, Grenada, St Kitts and Nevis, and Saint Lucia.

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