The CBI Index: developing due diligence
As more countries enter the citizenship market, due diligence will be a defining element of differentiation between their programmes
The CBI Index treats due diligence as an asset. Within a citizenship by investment jurisdiction, a comprehensive background screening policy, applied both consistently and methodically, filters criminals and other morally questionable actors, as well as individuals who could otherwise become a liability or a financial burden to current citizens. Outside the jurisdiction, it provides certainty to other governments, which can trust economic citizens to have been fully vetted.
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To the applicant, this translates into citizenship of a country with sound borders, strong national security, and high international standing. Essentially, it also means extensive visa-free travel rights, as other nations look positively on the citizenship by investment jurisdictions and those who become their citizens.
Regard for global safety measures is a mainstay of several citizenship by investment jurisdictions
This theory finds its test in St Kitts and Nevis. In November 2014, the Federation lost visa-free travel rights to Canada, which expressed concerns about the country’s passport and identity management. Since 2015 however, and in the wake of an extensive internal and external review of its practices, St Kitts and Nevis has been leading the charge in transparency and due diligence.
The result has been overwhelming support from the international community, evidenced by the Federation securing, in 2018, the highest number of visa-free destinations than any other Caribbean citizenship by investment jurisdiction. Some of the countries that recently signed travel treaties benefitting Kittitians and Nevisians include traditionally isolationist Russia, as well as Moldova and Indonesia.
Some citizenship by investment nations have expanded their commitment to due diligence from a merely domestic realm, to one that considers, and includes, entire regions. With its Citizenship by Investment (Amendment) (No. 2) Act, 2017, for example, Grenada amended its laws to refuse citizenship to any applicant who “is denied citizenship by investment in another Caribbean jurisdiction”.
Another call for unity was sounded with the establishment of the Citizenship by investment Programmes Association (CIPA), whose founding members, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and St Lucia, aim to both harmonise and raise their standards and regulations.
Regard for global safety measures is a mainstay of several citizenship by investment jurisdictions. Malta, for example, bars any applicant who, without being able to demonstrate special circumstances, “has been denied a visa to a country with which Malta has visa-free travel arrangements and has not subsequently obtained a visa to the country that issued the denial”.
Similar provisions exist across Caribbean legislation or are enforced by the relevant Caribbean citizenship by investment unit through custom – but not all citizenship by investment jurisdictions make a nod to the international community. Neither Cyprus nor Vanuatu, for instance, exclude applicants with a history of visa refusals.
Overall however, the trend among well-established citizenship by investment nations continues to be one of strengthening due diligence and international collaboration.
The 2018 Caribbean Investment Summit, held from 16 to 19 May, was conducted under the theme ‘Unity in the Age of Division: Emerging Trends of CIPs in an Uncertain World’. On 21 May, 2018, Cyprus announced it would inaugurate an era of more enhanced due diligence, with application processing expected to last six months. On 22 May, 2018, Malta held its First Citizenship by Investment Due Diligence Conference.
As more countries enter the citizenship market, due diligence will be a defining element of differentiation between countries, their programmes, and the applicants who become their economic citizens.
