Chetcuti Cauchi’s CIP Due Diligence Index
Chetcuti Cauchi’s 5 Pillars of CIP Due Diligence
The investment migration industry has been subject to no shortage of criticism. European Citizenship by Investment Programmes in particular have been bearing the brunt of considerable judgement from EU institutions. The EU Commission itself has recently published a report addressing Investor Citizenship and Residence Programmes in the European Union.
The expressed concerns revolve primarily around the perceived implications that citizenship and residency by investment programmes might have on the wider scale, namely for other countries’ security. Other preoccupations include the risk of abusing such investor programmes for money laundering and tax evasion and for the circumvention of tax reporting obligations.
However, such risks arise with other non-investment modes of acquiring citizenship or residency. More importantly, we are confident that these risks are sufficiently addressed by the due diligence standards emanating from the existing European and international legal framework for the prevention of money-laundering and the financing of terrorism. Chetcuti Cauchi’s CIP Due Diligence Index is a study of their application in practice by the established Citizenship by Investment Programmes (CIPs), and can be used as a foundation for the process of on-going improvement fostered by the industry’s stakeholders.
To download the full report, please click HERE
Some programmes stand out as employing the existing due diligence framework to the highest level and constitute an industry benchmark. Investors applying for an investment migration programme undergo comprehensive due diligence, including identity verification, source of wealth and funds validation, the evaluation of business and corporate connections, and a variety of special clearances. Nevertheless, there is still a divergence in the types of checks followed by each separate programme. The industry can only benefit from an agreed standard of due diligence followed consistently by all Citizenship by Investment Programmes.
Launched in 2019, the CIP Due Diligence Index is a result of the firm’s practical experience handling investor migration applications in over 12 investor programmes and conferring widespread industry consultation. Our lawyers and researchers have reached out to agents, governments and citizenship by investment units in all these programmes. Topped by Malta, the CIP Due Diligence Index ranks the due diligence conducted by all CIPs through an objective assessment based on Chetcuti Cauchi’s 5 Pillars of CIP Due Diligence: Identification, Financial Due Diligence, Clearances, Enhanced Due Diligence, and Reputation. Based on this study, we are putting forward our recommendations for the establishment of a minimum standard of due diligence to be followed across the Investment Migration industry. We trust that once greater standardisation and cohesion is achieved across citizenship by investment programmes, there will be no shred of doubt left as to the integrity and legitimacy of these programmes. This will allow CIPs to continue attracting valuable Foreign Direct Investment for their countries.
About Chetcuti Cauchi
Chetcuti Cauchi is an international law firm with offices in Malta, Cyprus, London, Zurich and Hong Kong. For over 18 years, Chetcuti Cauchi serves investors and business families choose and acquire citizenship and residency by investment, and performs all the legal and tax planning and reorganisation required as part of an investment migration project.
To download the full report, please click HERE
