The European Commission has published a report highlighting security loopholes involved with the citizenship by investment schemes operated in the Eastern Caribbean States. The rpoert says most important all five countries allow successful applicants the possibility to change identity after having obtained citizenship by investment, poses a security threat to EU. The report is reproduced below.
Since 2020, the Commission has been engaging with the five Eastern Caribbean states operating investor citizenship schemes (Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia) to obtain relevant information and data on those schemes, which are classified as potentially posing a high-risk to the integrity of the Common Reporting Standard by OECD, raising suspicion of possible tax evasion and money laundering activities39
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Based on the information received from the competent authorities, the Commission has concluded that all the investor schemes under assessment have a high number of successful applicants, with a total of at least 88 000 passports issued to date. For certain countries, this number is above 30 000 (34 500 passports issued by Dominica; 36 742 by Saint Kitts and Nevis). At the same time, the rejection rate is extremely low (between 3 and 6 %), which, together with the short processing times (as little as two months in some cases), raises questions as regards the thoroughness of the security screening
The successful applicants include nationals that would otherwise require a visa to enter the EU. The main applicants’ nationalities, according to the information received, include China and Russia, as well as Syria, Iran, Iraq, Yemen, Nigeria and Libya, among others. In this regard, the Commission welcomed the decision of March 2022 taken by all five Caribbean countries to suspend the examination of applications from Russian and Belarusian nationals as a reaction to the Russian aggression against Ukraine.
The Caribbean citizenship by investment schemes are currently some of the least expensive in the world for individual investors and families. In certain cases, the cost per individual is as low as USD 100 000. The other schemes under assessment are only marginally higher priced.
Information exchange with applicants’ country of origin or main past residence, based on the
information received, takes place to some extent in 4 of the 5 countries assessed. However, this does not appear to happen in a systematic manner. All five countries cooperate with the CARICOM Implementation Agency for Crime and Security (IMPACS)’s Joint Regional Communications Centre (JRCC) who assists with obtaining confidential information on each member of the application. However, none of the countries assessed require residence or even physical presence in the country before citizenship can be granted, or even during the application process.
Security Loopholes
Private Agents – In some cases, the countries make use of private agents throughout the application and screening process, including for in-person checks and the verification of the documents submitted by applicants. The externalisation of the verification process to private companies is an additional factor that raises doubts as regards the access to law enforcement and judicial authorities’ information in the country of origin or main past residence.
Identity Change – Finally, to various extents, all five countries allow successful applicants the possibility to change identity after having obtained citizenship by investment. In Antigua and Barbuda and Dominica, it is allowed as of five years after obtaining citizenship; in Grenada after one year; in Saint Kitts and Saint Nevis, it is allowed upon obtaining citizenship. In some cases, multiple name changes are also allowed (according to the available information, only Saint Kitts and Nevis limits it to one change).
Low rejection – Overall, the short processing times, low fees, high number of applications and low rejection rates, as well as certain aspects of the security screening procedures are elements which suggest that the operation of such schemes could pose certain risks for the security of EU Member States.
The fact that successful applicants are then allowed to change their identity once the new nationality is obtained raises further potential security risks.
European Commission
While bilateral consultations are ongoing, the Commission will continue to work in close cooperation with those third countries to find long-term solutions once it has completed its assessment. In this context, the Commission will convene the Joint Committees of experts established by the bilateral visa waiver agreements, whose aim is to monitor the implementation of the agreements and settle disputes arising from their application.
Refer to the sixth report on investor citizenship schemes.
