by Kevon Browne
St. Kitts and Nevis (WINN): The Ukraine war has affected oil prices and the cost of goods globally, the freedom of movement of Russians, especially the country’s oligarchs and Citizenship by Investment Programs participants in European and Caribbean countries.
While the issue of a “fair share” of CBI revenues in St. Kitts and Nevis is a hot button topic for the Premier of Nevis, the Hon. Mark Brantley and Deputy Prime Minister the Hon Shawn Richards, the program, on the whole, may be under threat.
A program, according to information provided by the Premier of Nevis, that heavily impacts the economy in St. Kitts and Nevis.
“Just two miles away, you hear surplus, surplus, surplus, surplus, surplus, surplus, cash in the bank, cash in the bank, cash in the bank. Land for debt redeemed. What do you all think is buying all of that and paying for all of that? [Do] you think there is some genius sitting down in St. Kitts who is a financial guru? No. The only thing that is happening is the inflows from CBI… and that is really what is fueling the growth, fueling the development,” said Premier of Nevis, the Hon. Mark Brantly during his March 31 press conference.
According to Brantley, from 2007 to 2021, St. Kitts and Nevis made $5.145 billion in revenues from the CBI program.
During a Peoples Labour Party press conference on March 16, Prime Minister the Hon Dr Timothy Harris warned that the program is not as stable a revenue earner as is assumed, and extenuating circumstances may get in the way.
“We do not know the certainty how the life and the turnout of the program will be from year to year. So one year you could look very good as we did last year, we knock board thank god for that, and we’re prepared to be some consideration. But what have we just heard? We just had to ban the Russians, which were perhaps the second or third important market for our program… No wrongdoing in St. Kitts [and] no wrongdoing in Nevis.”
Dr. Harris further stated that the ban would negatively impact projection if the war in Ukraine is prolonged.
“The outcome of Russia invasion in Ukraine and the international community says, do no business with these people who are sanctioned, and they required of us, others to do more than some and so it means for a while Russians would not be able to participate in our program. So even our projections for this year, if that ban is prolonged, will be significantly impacted.”
One such extenuating circumstance is the Russia and the North Atlantic Treaty Organization (NATO) countries’ tensions.
One month into the conflict, several rounds of peace talks and Russia’s continued advances on Ukraine suggest that the conflict between Russia and NATO may last long after the physical assault in Ukraine.
The War in Ukraine, Russian Oligarchs and CBI
Following Russia’s invasion of Ukraine, the United States (US) and the European Union (EU) took steps to limit access to their countries by people who carry passports obtained by economically investing in another country, internationally known as “golden passports.”
Wealthy Russians are among those for whom such passports are popular.
The US and EU are also placing pressure on countries that issue passports; the EU has given some OECS countries until 2025 to abolish the CBI programs or risk losing visa-free access to the EU.
The EU passed a law giving countries with CBI programs three years to phase out the program or face visa requirements for all its passport holders.
The resolution passed by the parliament with 595 votes to 12, and 74 abstentions, says golden passports should be phased out fully.
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 and urges countries within the Commission to follow suit and add pressure on CBI countries.
Additionally, the United States has moved to decline visas to holders of passports obtained through CBI.
Three U.S. legislators introduced the “No Travel for Traffickers Act” on March 3, penalising countries that operate CBI programs by revoking eligibility for U.S. visa waivers.
The US is also working with the United Kingdom and the European Union to eliminate visa-free travel in the Schengen area, including Bulgaria, Malta, and Cyprus, all of which have CBI programs.
The Act was introduced to the U.S. House of Representatives by Congressmen Burgess Owen (Utah), Steve Cohen (Tennessee), and Tom Malinowski (New York).
The Congressmen claim CBI programs “require little vetting and are notoriously abused by human traffickers, international criminals, and corrupt oligarchs.” and said that Russia exploits these programs and their “golden passport” schemes for a back door into other countries.”
Antigua and Barbuda is robustly fighting against this move by the US and the EU.
Premier Brantley suggested that the resolution focused on the EU’s members with CBI programs, Bulgaria, Malta, Cyprus and Portugal.
So far, the visa-free ban is a recommendation, and the action to be taken still has to be decided on by the European Council.
“We have not yet had any form of communication from the EU on this matter. I believe what has happened is that in response to the EU parliament recommendation, Prime Minister Gaston Browne of Antigua and Barbuda would have made some public statements, and I then saw some headlines suggesting that programs are under threat and under attack from the EU,” said Brantley during his March 31 press conference.
The Minister of Foreign affairs said discussions on the issue are ongoing first on March 30 with the Ambassador from Romania and on April 1 discussion with the EU Ambassador to Barbados and the Eastern Caribbean.
What does this mean for CBI Programs?
Revenues from the program are likely to suffer if new visa restrictions are placed on Caribbean Countries.
The selling point of most CBI passports is visa-free access to countries.
Currently, St. Kitts and Nevis has visa-free access to 190 countries, and if the program is not phased out by 2025, visa-free access will be limited, and the CBI programs may suffer because of the ban.
Antiguans, Grenadians, St. Lucians, and Dominicans will lose visa-free entry rights into Europe if the CBI programs are not phased out by 2025. Regardless if you purchased the passport or received it as a born and raised native.
The United Kingdom is planning to impose the same restrictions.
In response to this development, St Vincent and the Grenadines Prime Minister, Dr Ralph Gonsalves, reiterated that “the United States has practically closed the door” on that issue and that Canada has done so to some extent.
On November 22, 2014, Canada imposed a visa restriction on St. Kitts and Nevis citizens due to concerns about our Citizenship by Investment program’s passports and identity management practices.
Dominica’s Prime Minister Roosevelt Skerrit is among several Caribbean leaders who are advised to take the EU resolution seriously.
The prime minister says, “I certainly think the CIP (CBI) countries should worry about it. I believe that the EU is worried about how rigorous the due diligence is being done on candidates receiving citizenship. I’ve always said that due diligence is the best known to man,” he added.
Skerrit said countries offering CBI programs should begin to develop strategies to work with the EU to create an environment where CBI countries maintain the programs and visa-free travel to Europe.
Nuri Katz, President for Apex Capital Partners, a licensed agent throughout the world for CBI, in an article on Domica New Online, said any move to phase out the program in CBI countries could crash their economies.
“Many of the economies of the Caribbean really heavily rely on [CIB] funds for the governments to function. This would be a huge challenge. This would be a hard blow. I can’t imagine how difficult that would be,” he added.
WINN reached out to Sarah Nicklin Group Head of Public Relations at Henley & Partners, an internationally known citizenship planning firm that operates passport sale schemes, for comment on the EU’s recommendations to phase out the programs.
Should countries involved in the program be concerned, and what could be the implications for these programs?
The response, “it would be more valuable to contact the industry body based in Geneva, the Investment Migration Council.
WINN is awaiting a response on this.
In St. Kitts and Nevis
With St. Kitts and Nevis averaging $343 million a year for the last 15 years from CBI receipts, what happens if the program stops?
Prime Minister, the Hon Dr. Timothy Harris, said in a Facebook post that “A united effort is needed among Caribbean territories in order to challenge recent moves to block #Citizenship by Investment Programmes (CIP) by the European Union, and has threatened visa restrictions to countries that offer them.”
Dr. Harris believes the consequences to the region will stretch outside of the participating member states. Thus a differentiation must be made between the quality of and the economic impact of the programs on the way of life within the region.
Conversely, Minister Brantley suggested alternative approaches to securing revenue for the country.
“At the national level… we have to find new and creative ways to grow our economy, and we have to look beyond CBI and see CBI as a part of the economy but not the economy exclusively. We must now seek to attract investment that is not necessarily connected to CBI… CBI will continue to be important to us as indeed Tourism in Nevis is going to continue to be important to us, but we must find ways to diversify around that and add additional strings to our bow as we try to develop and diversify our economy,” said the Premier of Nevis, Mark Brantley, at the March 31 press conference.
We await news of the future of these “golden passport” schemes.