Very recently, top Caribbean and high-ranking US officials met to openly discuss issues concerning the former’s citizenship by investment programs. The roundtable resulted in six new principles that Caribbean Citizenship by Investment Programs will now have to follow, and the Caribbean governments of Antigua & Barbuda, Dominica, Grenada, St Kitts & Nevis, and St Lucia have indicated their commitment to meeting them.
In short, the principles proposed by the US are:
- Collective agreement on the treatment of denials: Not to process applications from persons whose applications have been denied in another CIP jurisdiction by proactively sharing information on denials.
- Interviews: Conduct interviews with applicants, whether virtual or in-person.
- Additional checks: Each jurisdiction will run checks on each application with the Financial Intelligence Unit of its respective country.
- Audits: Audit the program annually or every two years in accordance with internationally accepted standards.
- Retrieval of passports: Request law enforcement assistance in retrieving revoked/recalled passports.
- Treatment of Russians and Belarusians: Suspend processing applications from Russians and Belarusians.
Many have branded the meeting as a negative issue, citing the threat the US interference with Caribbean Citizenship by Investment Programs to the offering countries’ sovereignty and right to self-government.
But while the US interfering in Caribbean citizenship by investment matters is indeed a prime example of a global superpower meddling in developing countries’ local affairs, labeling it harmful does not take the vaster geopolitical implications into consideration.
The US-Caribbean Meeting A Positive for Citizenship by Investment Programs
It is no secret that Citizenship by Investment Programs have drawn the attention of global states of imperium, such as the EU and the United Kingdom, both of which have government officials who actively oppose the practice.
So, another global goliath entering the stage may seem like overkill now, but the case with the United States is quite different, as the method in which the US government approached the matter highlights the vast variation in its objectives compared to those of the European superpowers.
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Look at who attended the meeting. The Caribbean sent out all their top officials who are relevant to the issue, from Prime Ministers to CEOs of their citizenship by investment programs; all the decision makers were present.
On the US side of the table were a multitude of top-ranking financial officials from the US Treasury, the Financial Regulation Department, and more.
The meeting’s objective was not to pressure Caribbean Citizenship by Investment Programs so they eventually close but rather to streamline them and ensure their financial and operational credibility and sustainability, as the US understands how crucial they are to Caribbean economies.
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In 2020, St Kitts & Nevis’ Citizenship by Investment Program made up roughly 30% of the country’s GDP. Dominica‘s contributed to 25% in 2019 and accounted for 52% of the government’s entire revenue. Caribbean Citizenship by Investment Programs are a foundation of their country’s economies, and the US realises that and does not want to threaten that lifeline but instead wants to ensure they remain financially safe and help combat fraud and AML practices.
This stance strikes a colossal variation from the EU and UK’s stances, as it marks the first time in recent memory a global superpower is actively helping Caribbean Citizenship by Investment Programs instead of blindly criticising them from 3,000 miles away.
With the exemption of banning Russians and Belarusians, the practices are all basic operation and financial quality assurance procedures that will not hinder the programs, but instead increase their sustainability and overall standard of excellence.
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By adhering to these simple principles, Caribbean Citizenship by Investment Programs ensure that the process is risk-free, compatible with US financial regulations, and are governed by a set of enhanced standard operating procedures (SOPs).
The audits, enhanced due diligence checks, treatment of denials and sharing of information, and standardised retrieval of passports are all logical and applicable changes to the Caribbean Citizenship by Investment Programs that would have eventually come into play whether the US pushed for them or not.
The interviews are another excellent addition, as, although they represent another step in the process (which is very short and fast), they do offer a better overall procedure.
Interviews enhance the authenticity of the program and its international marketing agents, as a client will be more comfortable knowing that their agent is setting up a direct line of communication for them with the government, ensuring that the agent they’ve chosen is a certified one.
Interviews are another excellent addition, as, although they represent another step in the process (which is very short and fast), they do offer a better overall procedure.
Secondly, interviews offer a simpler way of sharing information, as instead of government officials pouring through documents and having to request additional information or explanations (many of which come from cultural and political procedure variations between different countries), they can just do so within the interview; hence making the process much more efficient and considerably quicker.
The proposed principles are all operational and financial-oriented, and they make the programs better. The only semi-political one among them is the banning of Russians and Belarusians.
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Sources close to those attending the meeting insisted that the ban was due to increased difficulty in conducting proper due diligence on Russians and Belarusians as they are part of a conflict zone, as well as the challenge of keeping track of sanctions and individual cases, which, on paper, puts this principle among the financial standardisation overtone that encompasses the others.
A (very small) minority seem to think this is the cost of the US backing Caribbean programs, as it is imposing its political stance resulting from a growing global political bipolarity. But if this was the case, then it wouldn’t just be Russians and Belarusians on the list, so this argument is pure speculation at this point.
A Strong Ally
The US meeting with the Caribbean officials, in my opinion, should be viewed as a positive step within the region. The objective was clearly not to pressure or condemn the practice of citizenship by investment, but to elevate it to a higher level.
One Caribbean citizenship by investment stakeholder I was recently talking to highlighted that if the US really wanted to shut down these programs, it could simply offer financial aid amounting to much more than what these programs generate in exchange for greater political and financial alliances.
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Although this is an oversimplification, the essence of it remains true, as the US, with its mighty economic prowess and political influence, could have done significant damage if that was its end goal.
Consider the fact that more than 50% of the tourists in the Caribbean hail from the US and that American airports are a major global gateway to and from the Caribbean, and you’ll better understand the position of power the US can possibly negotiate from.
But the crucial thing is that it didn’t leverage its might but instead offered its insight and support, and to me, that is a great gain for the Caribbean states, as they now have a strong ally supporting their programs instead of slating them, and that is undoubtedly a win.
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