The 2019 CBI Index: Due diligence - the cornerstone of CBI

Thorough due diligence is the cornerstone of the citizenship by investment industry. Countries that offer citizenship by investment have a fundamental interest in ensuring that only quality applicants are accepted, not least because of the reputational and security threat that an unvetted applicant could pose. 

This is even more true for countries where citizenship by investment plays a vital role in the economy, as the loss of a programme, or any of the incentives that lead investors to choose said programme, could lead to severe national setbacks.

In the Caribbean, citizenship by investment is a driver of the economy, in some cases providing between 10 and 20 per cent of GDP. Accordingly, the Caribbean countries operate far-reaching, strict, and rigorous due diligence programmes – for which they have since become internationally recognised. 

The programmes are not identical but have adopted similar processes, namely, insisting on know-your-client pre-vetting by approved agents, internally checking documents and information, outsourcing enhanced due diligence to professional firms, and collaborating with national, regional, and international bodies. 

FACT’s role is to ensure that the enhanced due diligence phase is comprehensive, providing a
complete and accurate picture of the applicant.

Suitability for citizenship

Applicants must be deemed suitable for citizenship. This means that they must be of good moral character, have no criminal record or link to criminal activity, pose no security or reputational risk, and have a clear and clean source of funds, including traceable employment and business records. Furthermore, applicants must be honest, meaning that all information provided in their applications must be truthful to the best of their knowledge.

Data acquisition

To establish applicants’ suitability, FACT obtains data on the applicant from a variety of sources, beginning with the applicants themselves.

Applicants must provide: (1) identity documents, for example, passports and visas, birth and marriage certificates, IDs, police certificates, a CV, certified photographs, and medical tests; (2) personal history disclosures, including residence, education, and employment histories covering at least the last decade; (3) financial records, including 12 months’ bank statements, a bank reference, information on business history, wealth, and assets, and documents proving sources of wealth such as incorporation documents, share certificates, and investment portfolios; and (4) character information, such as personal and professional references. All documents provided by applicants must be originals or certified and legalised copies.

Within FACT, each of these documents is examined and used as a basis to launch investigations to validate the documents and verify the information provided. 

Validation and verification

Document validation includes, among other things, contacting the entity responsible for issuing the document to authenticate it and confirm its contents. For example, a certificate of no criminal conviction may be validated by contacting the police office that purportedly issued the document.

Information verification is extensive and involves conducting online investigations (including deep-web searches), researching multi-lingual public records, and checking international criminal, sanctions, wanted, compliance, and political exposure databases. Media profiles are assessed, oftentimes using online sources.

We also carry out site visits, establishing applicants’ geolocation and ensuring that, for example, the schools, homes, and businesses listed by applicants exist as described and are in good standing.

Source of funds, as well as employment and business records, are given special attention, and require experience in detecting money laundering, bribery, and fraud. Our enquiries extend to business associates and the opinions issued by competitors, as well as any legal cases (civil or criminal), investigations, or charges against any business entity connected to the applicant. 

Judging the prospects

Appropriate action by a citizenship by investment nation requires full clarity on applicants and their families. FACT therefore collates and evaluates the information, considering relevance, correctness, and completeness, and determining the reliability of each source of information. We then prepare a comprehensive report, applying a threat matrix for each of the following five elements: (1) personal, (2) business, (3) wealth, (4) criminal record, and (5) security concerns. The potential prospects of an application and our overall recommendations are also included.

Due diligence is a crucial step in the citizenship by investment process and one that is essential to countries wishing to protect their programmes from criticism and harm. FACT is proud to partner with the Caribbean, and to be a part of the high due diligence standards the region upholds.  

Kieron Sharp is the CEO of FACT Due Diligence (‘FACT’), having joined following a distinguished career in the police spanning 30 years. Kieron trained at the FBI National Academy and has acted as the Head of the Economic Crime Department at Interpol and as Detective Chief Superintendent in charge of Specialist Crime Operations.

FACT is a leading due diligence firm specialising in crime prevention and detection. It provides a range of specialist intelligence services encompassing financial crime, anti-money laundering, fraud, bribery, regulatory compliance, online investigations, forensics, reputation and crisis management, and data privacy. Headquartered in London, FACT operates globally, and has an international network of partners including business, legal, and government entities and law enforcement agencies. It has almost four decades of experience and the ability to conduct physical, country site visits, online investigations, and deep dive analysis.