Caribbean countries urged to work with EU and US on CBI Programme

by Santana Salmon

A senior official of the International Monetary Fund (IMF), has urged Caribbean countries to work in close collaboration with Europe and the United States to address concerns being raised by these countries as they relate to the Citizenship by Investment Programme (CBI).

The IMF Director for Western Hemisphere Department, Ilan Goldfajn, said that the CBI programmes have been an important source of revenue in some Caribbean countries, providing critical funding for public investment such as building resilience to natural disasters.

Under the CBI, foreign investors are afforded citizenship of a country in return for making a significant investment in the socio-economic development of the particular country. Several Caribbean countries, including Antigua and Barbuda, Dominica, Grenada, St. Lucia, and St. Kitts-Nevis have instituted CBI programmes.

The United States has moved to decline visas to holders of passports obtained by the CBI, and the European Union has passed a law giving countries three years to phase out the programme or face visa requirements for all its passport holders.

The EU Parliament has called for an EU “levy of a meaningful percentage on the investments made – until ‘golden passports’ are phased out, and indefinitely for ‘golden visas’” within the block.

“It also asks the Commission to put pressure on third countries that benefit from visa-free travel to the EU to follow suit,” according to the EU website.

The resolution passed by the parliament with 595 votes to 12 and 74 abstentions says golden passports should be phased out fully.

Last month, the Antigua and Barbuda government said it had stepped up its efforts to stave off efforts by the EU to derail the CBI, with Prime Minister, Gaston Browne indicating that he has sent a letter to the EU on the issue.

“I have taken the opportunity to write to them, to let them know the impact that they are about to inflict on our CIP programmes and the impact on our economies,” said Browne, who had earlier called on member countries of the Organization of Eastern Caribbean States (OECS) to provide a united front on the issue.

Asked if Caribbean countries should do away with their Citizenship by Investment Programme in light of the moves by Washington and Europe, Goldfajn said CBI revenue can be “uncertain and volatile and therefore it does not represent a stable and predictable source of fiscal revenues.

“Depending on each country’s circumstance, the Fund’s advice has been to use these non-permanent resources to create or enhance existing saving funds for self-insurance against natural disasters, debt reduction, and public investment. In the medium and long term, countries should seek diversification from CBI revenues.

Goldfajn added: “Meanwhile, Caribbean countries should continue strengthening due-diligence and transparency processes to ensure the integrity of their CBI programs and work in close collaboration with Europe and the United States authorities to address their concerns.”