Opinion by World Citizenship Council
Due diligence is the core of the CBI/RBI industry and unknown to many it is the hard work and dedication of due diligence professions is what the keeping the industry afloat. With increasing number of wealthy high networth investors applying for these schemes, it also tests the integrity of due diligence.
CBI/RBI schemes offered by countries still don’t share data of high risk and refused applicants, who have applied to these schemes. Not sharing the data of denied or refused applicants including family members, simply weakens the due diligence process.
There are several cases of applicants who apply for both CBI and also a RBI scheme. Some even apply for a caribbean CBI passport and then apply for a golden visa scheme in Europe. Currently, the two industries CBI and RBI are disjoint when it comes to due diligence. This weakness allows criminals and corrupt pass through the checks applied. Because of one or tainted people, the entire industry has come under attack by the media. There is no estimate that how many families living at peace because of CBI/RBI schemes, enjoying travel freedom with a new life.
Last year Indian fugitive Nirav Modi, applied for Vanuatu citizenship and was denied by Vanuatu citizenship unit. The report said that Modi transferred $195,000 from his personal account to an authorised agent of the country, located in the South Pacific Ocean. His application was rejected after the government ran a check on him. His money was refunded back.
His refusal data was not shared to other countries running CIP’s or RBI schemes.
This week Malta IIP Agency said Two IIP applications turned down by Malta but accepted by other countries. Both these applications, from an Asian and a North African.
Malta’s rigorous due diligence checks uncovered the problems associated with these cases, which other countries couldn’t. The data could well be shared among due diligence unit of CIU’s so that such the cases can be reviewed again, if need be passports can be revoked.
Malta IIP CEO, recently said  We are also at the forefront in advocating for international sharing of critical information on rejected application, through already well-established channels in institutions.
St Lucia last year stripped passports of 6 six persons obtained through CIP.
OECD tax compliance
This week OECD listed a number of CBI/RBI jurisdictions citing such schemes are potential concerns of tax evasion avoiding CRS standards. OECD carefully analyzed over 100 schemes and announced the list. Portugal, Greece, Latvia, Spain, UK, Canada offering the biggest golden visa schemes were not listed.
It is not a blacklist, but OECD has recommended banks and financial institutions to ask account holders whether they applied for CBI/RBI schemes
- Did you obtain residence rights under an CBI/RBI scheme?
- Do you hold residence rights in any other jurisdiction(s)?
- Have you spent more than 90 days in any other jurisdiction(s) during the previous year?
- In which jurisdiction(s) have you filed personal income tax returns during the previous year?
The full list of countries implemented the OECD CRS standard is available here: http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/crs-by-jurisdiction/
Recommendations
The World Citizenship Council calls for establishment of a international committee for data sharing of CBI/RBI applicants. The committee shall maintain and share databases applications of those who have applied for 20 RBI and 10 CBI schemes to protect the integrity of due diligence and take CBI/RBI industry to next level with strong due diligence standards.
The Council recommends the CBI/RBI countries in the OECD list, to take necessary steps and get removed from the list at the earliest. The Council also proposes closer look and checks on tax evasion on applicants who apply for CBI/RBI schemes.
The investment migration industry will be only strong when working closely together. The World Citizenship Council has proposed several recommendations to improve the due diligence standards.
About World Citizenship Council (WCC)
World Citizenship Council (WCC) is a non-profit organization for research, development and promotion of the citizenship/ residency schemes throughout the world. The Council will focus on key areas, such as, due diligence and new technologies such as blockchain and will help Governments and industry professionals with these issues.
The Council will assist greater cooperation with CIU’s in matter of data sharing, due diligence and deployment of new technologies. Other issues such as migration, refugees, taxation and dual citizenship will be on the forefront. The council will officially open in 2019 and organize biggest forums, events and seminars to bring together Governments, Associations and professionals of the industry together to address migratory issues.
Membership is FREE
Please register for free membership in our website:Â http://worldcitizenshipcouncil.org
