The European Union (EU) and a Caribbean Community sub-grouping are fixing for a protracted fight over EU demands that these small, finance-starved island nations stop selling local passports and citizenships to wealthy foreigners, or their citizens will lose visa-free travel privileges.
The fiat from the EU to most of the nations in the Organization of Eastern Caribbean States (OECS) was contained in a demand letter to the governments of Antigua, St. Kitts, Dominica, St. Lucia, and Grenada in late June and it called for a complete abandonment of the citizenship by investment (CIP) or so-called golden passport scheme.
Through this program, wealthy foreigners — from countries whose citizens traditionally struggle to obtain visas, mostly to Western countries — can pay as little as $100,000 and invest in a local development sector in exchange for a local passport and citizenship. Once they obtain citizenship, this allows them to travel on local passports and enjoy visa-free travel to more than 100 countries around the world.
The EU and the U.S. have been arguing that these small island nations do not have the ability to conduct proper due diligence checks on applicants from far-flung Central Asian, Eastern European, and some Middle Eastern countries, for example, so their citizens who actually qualify for an OECS passport can pose a threat to security by becoming Caribbean citizens and traveling visa-free. They made it clear that the CIP is a financial lifeline to their economies.
Alarmed by the latest developments, leaders held an emergency meeting in Dominica late last week, traveling there after attending the wider regional summit in nearby St. Lucia.
Prime Minister Gaston Browne of Antigua, for example, is adamant that his island’s version of the program will remain in place as it is a “critical pillar” of the economy and cannot be abandoned without “viable, concrete, and credible replacement revenues. The government will not be pressured into a unilateral phase-out that would cause irreparable harm to the national economy and the welfare of our citizens,” he said.
But the EU appears to be holding its ground as well, making it clear that any failure of the governments to act will result in visa-free travel privileges being withdrawn for citizens from the participating countries.
“The EU now treats the mere operation of an investor citizenship program as inherent grounds for visa suspension, moving away from past practices of only targeting specific administrative flaws. Until the programs are fully phased out, the EU expects immediate safeguards, such as stronger due diligence checks and the exclusion of any applicants currently subject to EU sanctions,” the bloc said in its missive to governments.
Startled by the most pressing threat to the program in recent years, the leaders say they will soon mount an emergency mission to EU headquarters in Belgium for high-level talks on the issue with the EU Council, the commission, and senior policy advocates.
“These engagements will seek to deepen mutual understanding of the unique vulnerabilities and development realities of small island developing states, to explore practical and mutually beneficial solutions to the issues identified by the EU, and to strengthen the longstanding partnership between the European Union and the Eastern Caribbean,” the regional leaders said in a statement after the Dominica meeting.
They argued that any dismantling of the program as a significant revenue source “must be accompanied by a comprehensive framework that safeguards economic stability, protects development gains already achieved, and supports the creation of sustainable alternative sources of financing,” they said, meaning that the EU should assist in assisting with alternative revenue sources.
Countries sell citizenship and passports for as little as $100,000, coupled with investments in real estate and other development avenues. Western nations have railed against the scheme, suggesting that these small island nations lack the international due diligence abilities to properly scrutinize the background of applicants who buy the passports to enjoy visa-free travel that would not otherwise be available to them. Just recently, Ireland suspended visa-free travel to St. Lucia and St. Kitts, citing a lack of faith in the passport scheme, while the U.S. has warned that it is also moving in this direction because of similar concerns.
