By Moustafa Daly
In the latest move by the European Union (EU) to regulate residency and citizenship by investment (RCBI) programs within the union and elsewhere, the EU Commission just made a set of proposals that would make it easier for Member State officials to suspend visa-waiver agreements with countries seen to not be in line with EU’s visa policies.
The proposals include introducing a mechanism to suspend visa-free travels “for a third country that chooses to operate an investor citizenship scheme whereby citizenship is granted without any genuine link to the third country concerned in exchange for pre-determined payments or investments,” the EU Commission said in a report released in October.
“Investor citizenship schemes operated by third countries with visa-free access to the EU can result in risks or threats to the public policy or internal security of the Member States, including those related to infiltration of organized crime, money-laundering, tax evasion, and corruption,” the report cautions.
The proposals could affect ongoing immigration routes between the bloc and Caribbean countries, which industry professionals in the Caribbean see as an opportunity to build clarity.
“I personally believe that any proposal by the EU that has clear guidelines and expectations would be welcomed by any citizenship by investment unit [in the Caribbean],” says Richard Hallam, CBI director at Ora Caribbean.
“At the end of the day, we all want to ensure that these programs continue successfully for the benefit of the investors, the developers, and the host countries,” he adds.
As the executive branch of the EU, the Commission has the right to initiate proposals and request changes to EU laws. Such proposals, however, need to be voted on in the EU parliament before they’re formally adopted.
The EU has specific concerns with the Caribbean CBI programs
Earlier this year, reports indicated that the EU and the U.S. were asking Caribbean nations to adopt more stringent access requirements and provisions for their CBI programs.
Although they indicated they don’t aim to end CBI programs in the Caribbean as they bring significant economic advantages to the region’s economies, the EU did express some concerns over them.
The main goal of the EU reforms in the Caribbean is to make CBI programs “make use of private agents throughout the application and screening process, including for in-person checks and the verification of the documents submitted by the applicants,” explains Stephen Isidore, attorney and partner at Caribbean Commercial & IP Law Practitioners.
According to Isidore, the bloc also cautions against CBI applicants’ ability to change their identities/names when they apply for new Caribbean passports, enabling them to evade accountability if they were involved in illegal or criminal conduct.
Also, short processing times, low fees, and low rejection rates of CBI applicants continue to be significant concerns for the EU.
Dialogue between the EU and Caribbean nations is the shortest route
The EU, however, does not intend to impose a top-down approach with these new proposals. “I understood that the EU proposal explicitly discussed working with partner countries to address concerns, irregularities, and the tightening of application procedure and due diligence, and as long as that dialogue is open and individual countries are assessed on the merits and potential shortfalls of their own programs as opposed to blanket rulings being made effectively tarring everyone with the same brush,” cautions Hallam.
An open dialogue with CBI countries in the Caribbean has previously reaped fruitful results. When reports emerged that the EU has made six demands of the CBI programs in the Caribbean last July, there was a swift response from St Kitts and Nevis, which promptly hiked its investment threshold and introduced mandatory personal interviews to CBI applicants. Other CBI programs see the open discussions positively.
“The EU commission did make mention of the fact that all five Eastern Caribbean Countries did cooperate with the CARICOM Implementation Agency for Crime and Security (IMPACS)'s Joint Regional Communications Centre (JRCC) who assisted with obtaining the confidential information on each member of the application,” explains Isidore. “This was a very good move from the countries, and their participation without hesitation must be commended and will work well for them.”
Also, Isidore urges the Caribbean CBI industry to unite and seize this opportunity. “It is my view that the Eastern Caribbean Countries that are offering Citizenship by Investment programs should work in unity as one block to deal with the EU concerns.”
Can Dominica’s CBI turn it around?
Separately, Dominica’s citizenship by investment program has also come under scrutiny in the United Kingdom. In July, the UK revoked its visa-waiver agreement with the island-nation, along with Vanuatu, citing security concerns.
However, Isidore doesn’t foresee similar tensions between other Caribbean countries and the EU.
“I think none of the Eastern Caribbean Countries should be worried once they properly address those concerns to the EU’s satisfaction,” he explains.
He affirms the EU Commission’s proposals are a welcoming opportunity for Dominica to “properly scrutinize its program and take the necessary measures to satisfy the EU concerns and at the same time regain the British confidence in their program.”
“There is no better time for Dominica than now. Dominica should not allow this opportunity to pass,” he says.
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