By Moustafa Daly
The Prime Minister of St Kitts and Nevis, Terrance Drew, said that EU is working to establish a committee to review and structure the CBI programs of the Organisation of Eastern Caribbean States (OECS), which includes Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia.
“This EU committee has its agenda. I don’t think it’s one problem in particular, I think they just don’t want the islands to do CBI,” says Kevin Hosam, founder & chairman at EC Holdings.
“So after 6 months and [after] these requirements have been implemented, will the goal change? Will the EU really keep their word and leave the islands with visa free access? Only time will tell,” he adds.
The announcement comes shortly after Drew attended an EU-CELAC (European Union-Community of Latin American and Caribbean States) in Brussels last week, where leaders from all three regions agreed to continue working together to strengthen economic, social, and cultural ties, and address mutual security concerns.
“We reaffirm that by working together as sovereign partners, we are stronger and better placed to face the multiple crises and challenges of our times,” read the declaration of the EU-CELAC summit.
Drew and Michael Martin, the head of St Kitts’ Citizenship by Investment Unit (CBU), reportedly addressed the concerns of EU representatives over their country’s CBI program, outlining the measures taken by St Kitts to tighten the security and due diligence of the program to address EU concerns.
“These concerns were surrounding issues of security, issues of abuse of the program and the opportunity to be invited to be a citizen of the country,” said Drew following the summit, as per media reports.
The EU might establish CBI rules for the Caribbean, as did the US
Shortly after the summit, media reported that EU is seeking to establish six rules for the Caribbean CBI programs – similar to a move by the US earlier this year.
Stephen Isidore, attorney and partner at Caribbean Commercial & IP Law Practitioners, confirms the news to Uglobal: “I have been told that the six rules are correct. Look like St. Kitts and Nevis [will] move to implement [them] instantly.”
“It is really testing time for the Caribbean programs,” he adds.
As such, the EU could soon introduce the new rules to better regulate and manage the programs, and mitigate risks associated with them.
First, and most significantly, the EU is seeking to mandate Caribbean nations to increase the investment threshold of their CBI programs to at least $200,000 per main applicant, and $400,000 for any real estate investment.
If applied, most programs would significantly increase their investment thresholds. Some programs, like Dominica, offer citizenship for as low as $100,000, while most range between $125,000 and $150,000.
The second rule stipulates that due diligence on all applicants is to be conducted by reputable third-party agencies based in the EU, US, or the UK.
Similar to the US, the EU also seeks to implement mandatory in-person or virtual interviews with all CBI applicants –Dominica introduced similar measures last week. Moreover, it wants to end sending citizenship documents or passports via the post.
Also, funds will have to be subjected to thorough money laundering checks and need to be directly transferred to the host country.
Finally, the EU wants Caribbean countries to stop all promotional material that advertises their CBI programs aresbased on visa-free travel to the Schengen Area.
“We see St. Kitts and Nevis make a drastic move by basically implementing the EU’s guidelines, which in actual fact are very similar to the US guidelines that were presented a few months ago,” explains Hosam. “I think the islands already accepted the US proposal and are in the process of implementing. Although some EU demands are different I don’t necessarily see it as negative for the islands to implement.”
Unconfirmed rumors on the EU considering revoking visa-free access for Caribbean countries
Speaking to local media following the summit, Ralph Gonsalves, the Prime Minister of St. Vincent - a Caribbean nation that doesn’t offer CBI - claimed that the EU Commission is considering revoking visa-free travel for the Caribbean countries.
He cautioned against “severe implications, and for some of [the Caribbean countries] substantial, because the money for the CBI program is used as revenue, which goes to their recurrent expenditure,” he told a local media publication.
Gonsalves made his remarks in the context of his concern over the stability of the common currency of the Eastern Caribbean region, the Eastern Caribbean dollar, which St. Vincent shares with many CBI nations.
“You’re not going to have an alteration in the exchange rate, but if you have less US dollars coming in, you’re going to have less EC dollars in circulation, which means it would have a dampening effect on economic activity and very specifically on the fiscal front for those countries to pay the bills on a monthly basis,” he explained.
The claims are yet to be confirmed by any other Caribbean or EU official.
“I’m not certain whether [the six rules] is the requirement to avert any fallout from the visa-free to Schengen Countries that are now being enjoyed by the Caribbean countries,” adds Isidore.
Hosam expects the Caribbean nations to show willingness to do whatever it takes to keep their CBI programs afloat.
“The islands heavily depend on their CBI programs without them some islands face serious fiscal challenges so they are going to do what it takes to appease the EU, UK and US and but closing the programs are not an option to them,” he explains.
This is a developing story.
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