For the most part, a passport indicates citizenship, membership, certain rights and residence. For others, especially the world’s wealthiest, obtaining an additional “stronger” passport than that provided by their country of birth has spawned an international industry supporting their legal sale.
So far, this has been done with the consent of governments around the world who have their own plans.
It may be coming to an end.
In recent weeks, sanctions stemming from the war in Ukraine have merged with longer-term concerns about the possible use of these programs to facilitate organized crime, visa free travel and influence.
As a result, the European Union and the United States are considering legislation which, if introduced, will penalize Antigua, Dominica, Grenada, Saint Kitts and Saint Lucia if they do not end their citizenship programs. by investment or CBI. Britain, which also ended its “golden passport” scheme, is conducting a due diligence exercise on CBI programs in the region.
In the US, a bipartisan No Travel for Traffickers bill was introduced in the US Congress on March 3. If passed, it will revoke any country’s eligibility for the U.S. Visa Waiver Program if it offers citizenship through investment programs. It would also order the US administration to cooperate with the UK and with the EU to end its visa-free Schengen area in Europe for all citizens of countries selling passports.
Those who introduced the bill are concerned about liability, how CBI programs may be administered, and in particular their use by Russians. They are also highly critical of the related practice of offering what they describe as “fake” investments “such as real estate”.
Pressure to abolish
On March 9, the European Parliament passed a strongly worded resolution, broadly critical of Europe’s own citizenship and residency programs. Its text contained strong language against third countries selling citizenship and indicated concerns about agents. He was highly critical of programs with little or no residency requirements and weak security checks that were sold “for the express purpose of facilitating visa-free travel to the Union”.
The statement proposes that the European Commission and the Council now draw up a proposal for a regulation, introduce other legislative measures if necessary, and instruct the two bodies to exert “as much pressure as possible” to ensure that third countries which benefit from visa waiver “abolish their CBI regimes”.
It remains to be seen how the European Council and Commission will decide to act on the third country recommendations, but the more general language coming from EU Commissioners and many Member States regarding the EU’s own citizenship schemes does not bode well. nothing good.
Unsurprisingly, the five OECS governments that depend on CBI programs for significant amounts of their recurrent and investment revenue have fought back.
Antigua Prime Minister Gaston Browne said any loss of access to the EU’s Schengen area would “clearly undermine” the value of CBI programs.
He also indicated that the stance taken by US and European lawmakers would create significant economic problems for CBI countries in the Caribbean. In the case of Antigua, he said, these programs accounted for 10 to 15 percent of government revenue, a figure reaching 50 percent elsewhere in the OECS, the Organization of Eastern Caribbean States.
Seemingly recognizing that citizenship by investment can have a lifespan, the Cabinet of Antigua is now reportedly proposing the creation of a regional or sub-regional regulatory body for OECS citizenship programs; a regional response in the US and EU; address concerns regarding compliance and security issues; place more emphasis on existing residence investment programs; and the development of an enhanced long-term “digital nomad” residential scheme.
However, it is unclear how much attention the US or EU will give to lobbying, not least because other Caribbean governments publicly or privately oppose the idea of selling citizenship and , in some cases, have already been briefed by external agencies on the broader implications for regional security.
Speaking with characteristic candor recently, St. Vincent Premier Ralph Gonsalves said legislative action in the United States and the EU confirms his administration’s principled position that sovereignty can never be for sale.
Observing that CBI programs in the sub-region are not sustainable, Gonsalves said the danger is that if Caribbean countries selling citizenship do not end their programs by 2025, all Caribbean passport holders countries with such programs may need a visa to travel to Europe.
If, as seems likely, the threat from the US and EU is real, Caribbean CBI countries will need to find ways to quickly offset a potentially large drop in annual revenue. Although it is not easy to determine the amount involved – different governments have different reporting methods – a recent report by the Eastern Caribbean Central Bank indicated that in 2019 OECS countries received some 542, EC$9 million ($184.7 million) from citizenship programs, noting that Dominica, St. Kitts and, more recently, Grenada have been significant recipients.
In the face of a world that is rapidly dividing and adjusting to new norms, this would seem to be the time when CBI countries agree to end the sale of passports and update or design residency programs by well-regulated and internationally acceptable investment. Such an approach could be accompanied by longer-term Caricom-compatible “digital nomad” programs, offering nationally developed, private sector-led facilitation packages involving healthcare, rental of property, education and pathways to philanthropy.
While unlikely to quickly offset the monies citizenship schemes currently generate, such an approach could allow OECS countries to create new revenue streams, create a new high-end market for long-term stays and find creative ways to attract high net worth individuals and young professionals. able to fill skills gaps.
While many of the approximately 35,000 Caribbean citizenships that scholars say have been purchased to date have been for entirely legitimate reasons, international concern will not go away over the opacity of identity. of those, including family members, who have in effect become Caricom citizens with the freedom to travel visa-free to many international destinations.
What is clear is that the sweeping sanctions imposed on individuals in Russia and Belarus, endorsed by some Caricom governments and the Dominican Republic, will now raise broader and more serious security issues, and not just who was sold a passport without any residency. requirement, but compared to other offshore arrangements lacking transparency.
– David Jessop is a consultant to the Caribbean Council. Email: [email protected] To access previous columns, visit: www.caribbean-council.org/research-analysis