By Caribbean News Now contributor
BASSETERRE, St Kitts — Leading activist and legal figures in St Kitts and Nevis have called for the government to address fraudulent practices surrounding the nation’s citizenship by investment (CBI) programme.
During the most recent edition of WINN FM’s ‘Inside the News’ talk show, lawyer and former government minister Dwyer Astaphan urged the government to conduct a “forensic” investigation into claims of citizenship gained through “less than substantial” investment into the country.
Astaphan, who regularly makes appeals to put an end to corrupt practices in St Kitts and Nevis, claimed that unscrupulous agents are continuing to sell the nation’s CBI real estate option for up to less than half the legitimate price of $200,000 for a single applicant.
Astaphan said developers and agents are selling shares in “thin air” real estate projects that will not be completed, to the detriment of genuine investment into the nation’s Sustainable Growth Fund (SGF).
“The people of the country are being made fools of,” he said.
Astaphan added: “Everyone involved in the St Kitts and Nevis CBI programme – such as potential applicants and well-meaning agents and developers – should welcome a thorough investigation because it’s good for all of us.”
He chastised dubious developers and agents who have “broken the laws” of St Kitts and Nevis. Astaphan said national revenue generated from the CBI programme, which was formed in 2008, has been dwindling since hitting its peak year in 2014.
Astaphan said: “In 2008 the government raised CBI revenues of $12.5 million dollars; it was three percent of the recurrent revenue for that year. The peak year was 2014 when they raised $325 million dollars, which represented 42.3 percent of recurrent revenue. By 2016 there was a sharp drop to $175 million dollars, representing 27.6 percent of recurrent revenue. And finally, in 2017, it was just $149 million dollars, representing 24 percent of the recurrent revenue.”
Canadian Sam Bayat, owner of the Bayat Legal Group, who also spoke on the show, raised concerns about where the CBI funds are being allocated.
He said: “There are 80 government-approved real estate projects and there are not 80 projects completed. That is exactly the problem. There are empty shells around the island and they do not look good to tourists.”
Bayat also urged the St Kitts and Nevis government to “properly manage” its CBI programme to curb fraudulent developer and agent activity.
He suggested that the government should create an independent escrow fund, and control the construction stages to ensure all approved projects are actually built.
Bayat said: “The government may be happy that it gets its fees but what about jobs and the wider benefits for the economy from real estate investment?”
The Dubai-based lawyer added: “CBI is a noble concept and many countries have followed St Kitts and Nevis’ footsteps, such as Dominica and St Lucia and Malta, Cyprus and Bulgaria. Sometimes it can be so successful, but like any other concept, it needs to be managed properly.
“For example, the Park Hyatt in St Kitts and Nevis was extremely successful – it created jobs during the construction phase, permanent jobs and a lot of tourists.”
Bayat said the St Kitts and Nevis government needs to be more diligent about how it runs the CBI programme.
“There are billions of dollars that are coming to the island. The public sees the applicants as the danger but the government is the biggest problem – if they managed the programme properly there would be no problem,” he said.
Astaphan read out the latest parliamentary laws that state that investments must be held in a ‘trusted’ escrow account.
The former minster said: “The CBI unit has never published these escrow guidelines. That is a gaping hole in the system – and apart from this, the government should be inspecting the construction work and making sure it is completed and the investment is certified independently.”
Garth Wilkin, a partner at law firm Kelsick, Wilkin & Ferdinand, who also spoke on the radio show, accused the St Kitts and Nevis government of turning a ‘blind eye’ to CBI fraud.
Wilkin said: “The local courts have already shown that there are dubious practices happening. We should not tolerate it. We are being tarnished internationally because of greed. Why isn’t there a wider legislation change to weed out the negative aspects of the programme?
“It is common sense to assume that if someone is allowing gangsterism to take place, they are also part of the gangsterism.”
Astaphan concluded that, without a thorough and complete investigation of the CBI programme, “cheating will continue to take place and the people of the country will suffer.”