News Americas, WASHINGTON, D.C., Mon. April 20, 2015: The International Monetary Fund (IMF) has issued a word of caution on the growing citizenship by investment programs being instituted by several Caribbean nations.
Speaking at the press conference in D.C. Friday, Adrienne Cheasty deputy director of the Western Hemisphere Department at the IMF, insisted that while the programs have been a “valuable windfall to some countries in the area … it is very important that the programs be managed very impeccably.”
St. Kitts/Nevis, Dominica, Antigua & Barbuda and Grenada have all implemented citizenship by investment programs that allow foreign nationals to essentially pay for passports and obtain tax perks.
Cheasty advised that the programs need “careful governance and attention.” She also revealed that the IMF has cautioned countries to treat the earnings from citizenship by investment programs as windfalls to use them to pay down debt, because they might be there forever.
“For example, if Canada or the European Union felt the programs were not being managed well, they could disappear,” Cheasty added.
Her comments come as the Citizenship by Investment Program implemented by the island of St. Kitts/Nevis faced security questions by Canada, the US and the UK governments.
Canada last year imposed a visa requirement on all holders of St. Kitts-Nevis passport seeking to enter the country and the US’ Financial Crimes Enforcement Network (FinCEN) issued an advisory saying that certain foreign individuals were abusing the country’s program and obtaining SKN passports for the purpose of engaging in illicit financial activity.
Still Cheasty pointed to the fact that the Saint Kitts economy had grown at seven percent in 2014, and it is expected to grow again strongly in 2015 “largely because of the strong inflows from citizenship by investment receipts.”
The SKN Citizenship-by-Investment program offers citizenship to a non-citizen who either invests in designated real estate with a value of at least $400,000 USD, or contribute $250,000 USD to the St. Kitts and Nevis Sugar Industry Diversification Foundation.
New St. Kitts/Nevis Minister of Foreign Affairs, Mark Brantley, has said that the less than two-month old Team Unity Government continues to work on assessing and revamping the current Citizenship By Investment program to ensure transparency and legitimacy.
But the Migration Policy Center in D.C. warns that “background checks are only as good as the data on which they rely” leaving the chances of some foreign investors slipping through the net.
