Should specific nationalities be banned from CBI programs?
Citizenship by Investment programs are an excellent opportunity for those seeking a second citizenship, extending to their families. What is required in exchange from applicants? An investment in a foreign country.
Likewise, citizenship by investment (CBI) programs are a valuable opportunity for countries to attract foreign investment and support the development of their economy. CBI programs have grown in popularity in the last decade, and can have a significant role in the economy of small countries.
How has St Kitts and Nevis used CBI investment?
For example, in St Kitts and Nevis the citizenship by investment program has injected 700 million dollars into the country in the years between 2011 and 2016, according to figures from the International Monetary Fund (IMF). In 2017 the government created a Hurricane Relief Fund, supported by CBI applications, to rebuild the country’s infrastructure that was damaged by hurricanes Irma and Maria. Similarly, in Antigua and Barbuda, the income from CBI was used to rebuild Barbuda, also seriously affected by Irma.
Each country’s government defines the rules of each citizenship by investment program. Almost all the available CBI programs have a list of banned nationalities: countries whose citizens cannot apply for economic citizenship, except in very specific circumstances (such as having lived elsewhere for over 10 years, and not having economic ties to their home country).
According to current events, the list of banned nationalities changes from time to time. In March 2022, for example, all the five Caribbean countries that offer CBI programs, at one point or another, banned applications from Russian citizens, in the aftermath of the war in Ukraine.
Regardless of nationality, though, every single applicant to a citizenship by investment program has to go through an extensive process of due diligence that audits and investigates applicants aged 16 or over. This due diligence ensures applicants have no involvement with fraudulent or illicit activities, and to prevent high-risk individuals from obtaining economic citizenship.
Considering that these due diligence processes are thorough and reliable, is having a blanket ban in all citizens of certain nationalities the best strategy?
What happens when nations open up applications to all citizenships?
In the second half of 2022, Grenada decided that they would accept applications of nationals of all nationalities and assess these candidates on a “case-by-case basis.” The result? An almost threefold increase in applications, which soared from 167 in Q2 (April to June) to 462 in Q3 (July to September).
A win-win situation?
Frequently, bans on certain nationalities are used as tools to apply pressure on a government, similar to a political embargo. That’s the case of several sanctions that were applied to the Russian government and Russian businesses earlier this year. However, it is statistically impossible that, in any country, all its citizens be aligned with the decisions of their leaders. Among the 146 million citizens of Russia, many of them disagree, more or less vocally, with Putin’s choices regarding the war in Ukraine.
In this case, a ban by Citizenship by Investment programs could have unwanted consequences. By stating a political point a country could be, in practice, closing the door precisely to the individuals for whom having the chance to apply for a second citizenship might be a lifeline.
In September 2022 the Caribbean island nation of St Lucia re-opened their citizenship by investment program to Iranian applicants. The announcement came a few days prior to the worldwide uproar at the violence against women occurring in Iran, which was reported across global media. This is exactly one of these situations in which a ban would mark a political stance, whereas it is also possible to regard the welcoming position of St Lucia as an opportunity for those Iranian citizens who do not have a place in the current Iranian society.
In a nutshell, the issue of banning nationalities from CBI programs is multifaceted, with consequences to both sides of the equation. As we can see, the population of countries such as Russia or Iran is a diverse group, with diverse reasons to pursue economic citizenship in the Caribbean. Blanket bans should not be taken lightly, as they may have far-reaching consequences.
A reliable process of due diligence checks allows CBI countries to treat each application individually, thus guaranteeing a fair assessment of citizens of countries dealing with complex internal or external issues. At the same time, it also boosts growth opportunities for the countries that rely on Citizenship by Investment to diversify their economy, build infrastructure and, in short, improve life for everyone.
