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By Kevon Browne
St. Kitts and Nevis (WINN) – Launched in 1984, the Citizenship by Investment (CBI) program of St. Kitts and Nevis has been under scrutiny over the years for its development and unfortunate association with international criminals who hold SKN citizenship.
Regional focus and impact
For years, there have been concerns about CBI programs in the Caribbean, with reports of individuals with questionable backgrounds being granted citizenship. Countries such as St. Kitts and Nevis, Antigua and Barbuda, Grenada, St. Lucia and Dominica have all granted citizenship to individuals from countries where corruption and criminal activity are rampant. Recently, it was revealed that approximately 88,000 passports were sold between these five countries, raising questions about applicant vetting.
High-profile cases highlight issues
One notable case involved Taiwanese couple Ching-Yi Hsieh and Pai-Hung Wang, who were accused of defrauding investors and fled Taiwan on Dominican passports before being arrested. Another case involved Mehdi Ebrahimi Eshratabadi, who faced charges in Iran and obtained a Dominican passport, highlighting possible gaps in the CBI program’s due diligence process.
EU response
The European Union responded by stressing the need for regulatory reforms to manage the risks posed by investment citizenship programs. EU Home Affairs Commissioner Ylva Johansson mentioned the risks posed by countries selling citizenship to individuals who have no “genuine connection” to the country. The EU also pointed out that Caribbean countries could be negatively affected if investment citizenship programs are not adequately safeguarded, including losing visa-free travel privileges.
Regional reform commitment
Caribbean countries, including St. Kitts and Nevis, have pledged to improve transparency and due diligence measures in response to international concerns. The urgency of reform is reflected in the recent commitment of Caribbean governments to adhere to the six CBI principles proposed by the United States.
Economic impact and future development
Controversy surrounding CBI programs not only harms reputation, it also threatens the economic benefits these programs bring. Revenue from CBI programs has funded infrastructure and social development projects throughout the region. However, tighter regulation could affect future investment and economic growth.
In response to international pressure, St. Kitts and Nevis introduced stricter application procedures and strengthened background checks. The challenge is to balance the economic benefits of attracting foreign direct investment with ensuring national security and integrity.
The newly passed legislation establishes the Citizenship by Investment Unit (CIU) as a statutory body governed by a Board of Governors responsible for overseeing operations, setting policy and ensuring the integrity of the Citizenship by Investment Program. The CIU will be subject to annual independent audits to increase accountability and transparency in its operations.
In addition to establishing the Citizenship by Investment Unit (CIU) as a statutory body, the legislation also involves the establishment of a Continuous International Due Diligence (CIDD) Unit. This unit aims to uphold international standards by conducting ongoing due diligence on naturalization applicants. It will work with various international agencies to help ensure that citizens comply with international law, thereby maintaining the integrity of the program.
As regulators and the government begin to work out the issues associated with the CBI program, the future of St. Kitts and Nevis and the Caribbean as an economic driver remains uncertain. The balance between economic interests and national security is critical.
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