Caribbean citizenship, passport scheme under threat

Dominica’s Prime Minister Skerrit addresses the 72nd United Nations General Assembly at U.N. headquarters in New York
Dominica’s Prime Minister Roosevelt Skerrit addresses the 72nd United Nations General Assembly at U.N. headquarters in New York, U.S., Sept. 23, 2017.
REUTERS / Eduardo Munoz, File

When the banana exports scheme from the Caribbean to Europe collapsed in the late 90s, it sent governments on a frantic search for alternative revenues to replace foreign exchange earnings from the fruit.

By then as well, duty free trade in the Caribbean Community’s single trading market had begun to soar, meaning that taxes imposed on traditionally imported items had to be abandoned, resulting in further revenue losses.

To add to their economic woes, many island nations have been forced to find hundreds of millions of dollars to replace infrastructure damaged by increasingly powerful annual mega storms which help to deplete national treasuries.

The result is that several Eastern Caribbean nations, limited as well by small markets, tiny populations and a lack of resources, have moved to raise millions in revenues through a controversial program referred to as citizens by investment schemes or (CBI) through which foreigners could obtain local citizenships and passports by paying a prescribed fee, contributing to investment programs and passing key background character tests.

For some countries like Dominica, the CBI program has been an overwhelming success, with Prime Minister Roosevelt Skerrit recently saying that the island nation has raised more than $500 million in the past three years from the scheme to fund several key projects and to help rebuild after mega storms Irma and Maria in recent years.

Similar success stories have emanated from St. Kitts, Antigua, St. Lucia and Grenada which have similar programs but the sub region which thought it had just about found a golden avenue to maintain revenue streams, is now reporting that the scheme is under threat of extinction from bullying from the US and The European Union (EU).

Two American Congressmen, Burgess Owens and Steve Cohen have introduced the No Travel For Traffickers Act, barring citizens from any country with an active CBI program from visa free travel to the US and by extension, Europe as the two will cooperate to punish those with such schemes.

Introduction of the Bill has been timed to coincide with threats from the EU to also cancel visa free access for participating CBI countries to a large part of western Europe covered by the Schengen visa entry syetem. Antiguan Prime Minister Gaston Browne says the US and Europe are demanding an end to the lifeline program contending that the region does not have the capacity to conduct proper due diligence on applicants buying citizenship and local passports, charges he and other leaders deny vehemently.

“Our due diligence is robust. As far as we are concerned our Citizenship by Investment (CIP) program does not represent any risk to these countries as they so put it. I have taken the opportunity to write to policy makers and parliamentarians in the EU to let them know the impact they are about to inflict on our programs and the impact on our economies,” Browne told a recent radio interviewer.

For Antigua, he said, revenues from its program account for up to 15 percent of total earnings, but for others, this could rise to up to 50 percent and have devastating consequences.

“If these countries are successful in undermining the CIP program, it will create significant problems for our OECS currency union countries. You can imagine the impact for these countries,” Browne said even as Antiguan Foreign Minister  Chet Greene has vowed that the island will fight to the bitter end to maintain the program.

But even as the region fights to keep the lucrative program going, international enforcement agencies have indeed been able to track down a small number of people who invested in the program to escape police probes overseas for crimes linked to money laundering to bank fraud to violent felonies among other crimes.

The two congressmen argue in the bill that human traffickers have taken advantage of Caribbean countries so their programs should cease because of their alleged inabilities to properly vet applicants, even with the help of the international police system, Interpol.

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