The 2019 CBI Index: Beyond due diligence - the safeguard provisions

Due diligence is imperative to the longevity of a citizenship by investment programme: it affects a country’s reputation and diplomatic standing, as well as the safety of its citizens. 

It is not surprising, therefore, that significant emphasis should be placed on the rigorous vetting of applicants and their source of funds at all stages of the application process. Less commonly discussed but of near-equal importance, however, is the due diligence that is applied after the grant of citizenship.

As meticulous as a country’s due diligence may be, there are times when even the most sophisticated of radars can fail. For instance, an illicit actor may have a perfectly clean record prior to receiving citizenship, but may subsequently engage in criminal, dishonest, or dishonourable behaviour. Many citizenship by investment jurisdictions address this issue by retaining the right to deprive a person of economic citizenship.

All five Caribbean countries, for example, have provisions in their citizenship legislation to revoke a citizenship obtained by false representation, fraud, or wilful concealment of material facts. Some, including Antigua and Barbuda and St Kitts and Nevis, also allow for deprivation where a citizen is convicted of an act of treason or sedition in their new country of citizenship. 

In Dominica, revocation can occur in a number of situations, such as when the citizen is disloyal or disaffected towards Dominica, or when the citizen is sentenced in any country to imprisonment for a term of 12 or more months. In Grenada, revocation is connected to national security.

In St Lucia, convictions for criminal offences may lead to revocation, as may acts that could potentially bring the nation into disrepute. Indeed, this was cited as the reason behind the issuance of the Citizenship by Investment (Revocation) Order, 2018, with which St Lucia stripped six economic citizens of their citizenship.

Cyprus’ and Malta’s legislation closely mirrors that of the Caribbean, but these two nations have narrower timeframes in which to act. Cyprus can deprive economic citizens of their citizenship if they are sentenced to a term of imprisonment of at least 12 months within five years of the citizen being naturalised; Malta, within seven years of the citizen being registered.

In Turkey, citizenship may be ‘revoked’ when a citizen renders certain services to other states, most notably when these are incompatible with Turkey’s interests. Furthermore, citizenship may be ‘cancelled’ if acquired by “misrepresentation or by hiding essential matters constituting the basis in the acquisition of citizenship” – a decision that would also nullify the citizenship of the economic citizen’s spouse and children. 

In Jordan, services to other nations, including military or civil service, may lead to loss of nationality. Additionally, a certificate of naturalisation may be cancelled if the citizen commits or attempts to commit any act deemed to endanger Jordan’s “peace and security” or if the citizen misrepresents evidence on the strength of which citizenship was granted.

Deprivation of citizenship, of course, is not immediate and should follow due process of law, as exemplified by Antigua and Barbuda. In January 2018, one of the country’s economic citizens, Mehul Choksi, became embroiled in fraud investigations in India. This occurred after he had obtained economic citizenship and well after Antigua and Barbuda had received confirmation from Indian authorities that there were neither criminal nor ongoing civil procedures against him. 

Despite pressures from India to extradite Mr Choksi, Antigua and Barbuda upheld its citizen’s right to first defend his case in court, in a process that is likely to conclude by the end of 2019 and that may still result in Antigua and Barbuda taking corrective measures with respect to Mr Choksi’s economic citizenship.

A more controversial case unfolded in Vanuatu. Here, an economic citizen may be deprived of citizenship within 15 days of that person being sentenced to a term of imprisonment of 10 or more years. Economic citizenship may also be withdrawn where it was obtained by any false representation, fraud, or concealment of a material fact, but the person will only “cease to be a citizen 30 days after such finding.” 

In July 2019, Vanuatu extradited six Chinese nationals, four of which had received citizenship through its Development Support Programme. Despite the claim that the Ni-Vanuatu citizenship of the extradited individuals had been revoked, allegations were made that the 30-day timeframe had not been respected, and that none of the four citizens were given the opportunity to defend their case in court.

The ability to revoke citizenship is an important tool for both citizenship by investment jurisdictions and successful applicants to their programmes. Countries can use this to protect their citizenry from unlawful or dishonest acts by their economic citizens, to retain positive international recognition, and to maintain the prestige of their citizenship. 

In turn, this benefits economic citizens who continue to use their new citizenship in the way it was intended, whether for travel, business, or peace of mind.