Threat to CBI programs an opportunity for OECS Governments
March 18, 2022

Threat to CBI programs an opportunity for OECS Governments

THE SURVIVAL of the Citizenship by Investment (CBI) programmes in five of the independent member states of the Organization of Eastern Caribbean States (OECS) is under grave threat.

Over the last few weeks, following the invasion of Ukraine by Russia, the United States (US) and the European Union (EU) have taken steps that would ultimately limit access to their countries by people who carry “golden passports”, including rich Russians among whom such passports are popular. The US and EU are not just making it more difficult for golden passport holders to enter their countries, they are placing pressure on the countries that issue the passports; the EU has given some of our OECS neighbours until 2025 to abolish their CBI schemes or risk losing visa-free access to the EU.

Loss of visa-free access to the 26 Schengen Area countries in Europe would be a big blow to Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis and St Lucia; the OECS countries that run such programs, because their passports would immediately lose most of their revenue earning potential. And the revenue earned by CBI programmes in these countries is not insignificant. In fact, two of these countries have reported earning as much as 50 per cent of recurrent revenue from CBI schemes.

The EU Parliament is worried about the CBI schemes operated in the OECS because of the risk that vagabonds and scoundrels will use these programs as a backdoor to enter their member states. The concern of the EU Parliament is not misplaced. When St Kitts and Nevis for example, in its advertisements for “second passports” says that its programs have “high approval rates” and “no residency requirement”, no wonder the EU has described the CBI schemes operated in the OECS as having “low or no residence requirements and weak security checks…”.

Besides the reputational danger and financial dependence that nations risk when embarking upon Citizenship by Investment programs, there is something philosophically wrong with putting a nation’s passport up for sale. Such programmes rubbish the concept of solidarity, shared heritage, experiences, aspirations and responsibility that usually accompany citizenship. The CBI programs run by some OECS countries also create a moral dilemma for other CARICOM countries that do not have CBI programs. Does everyone holding a CARICOM passport deserve all the rights and privileges afforded by the Treaty of Chaguaramas or The Revised Treaty of Basseterre (for OECS countries), regardless of how they got the passport? What about voting rights or access to land purchases without the scrutiny and cost of an alien land holding licence?

The countries that run the CBI schemes say these programs are what allow them to survive in a global climate of uncertainty. It is one of the easiest options available when Governments consider economic diversification. That may be true, but easy is not necessarily better or sustainable. Hopefully, they will view the recent developments on the world stage as an opportunity to rethink revenue generation to include policies that place more emphasis on growing the productive sectors which tends to pay off in the medium to long term.