Investigative Spotlight: SKN’s Citizenship Programme
Contributed by Sofia Olson
The previous and current government of Saint Kitts and Nevis (SKN) has negatively impacted the Citizenship by Investment Programme in ways and means that rob the residents and economic citizens of SKN. These are all happening without any visible effort to address the issues looming right underneath their noses.
The main issue is how SKN residents and economic citizens are affected by the actions of the former Labour Party administration and the current government of Team Unity.
Here are the identified major concerns:
The U.S. FinCEN Advisory
The Financial Crimes Enforcement Network (FinCEN) has issued an advisory that passports obtained through St. Kitts and Nevis Citizenship-by-Investment (CBI) Program has been and is still currently being used to facilitate financial crime. The advisory comes as FinCEN was alerted that certain foreign individuals have been found to be abusing the CBI program sponsored by SKN to hand-out SKN passports for the sole purpose of laundering money channelled to different bank accounts and engage in illicit financial activity. (See full advisory here)
More so, financial institutions in the U.S. and elsewhere were advised not to accept Saint Kitts’ issued passports as a reliable means of identification rendering it not only obsolete but also a source of doubt and suspicion. Saint Kitts residents and economic citizens are thereby deprived of basic rights of access to financial institutions.
No China, No Love
During his time, Dr Denzil Douglas established a relationship with Taiwan. The agreement between the two countries has since then severed SKN’s ties with mainland China.
“I do not see at any time in the near future, I do not contemplate, that is under my watch and this Government that we are leading, that we would want to make any direct contact with China politically,” said Douglas in a report of ZIZ News in 2012.
SKN was the only country in the region to have neglected direct relations with China. This resulted in SKN passport holders being barred from obtaining visas to China.
A reliable source confirmed that there were a lot of instances that the visa is automatically denied without reviewing the application upon seeing the passport.
The heavier impact of the severed ties with China can be seen from the limited access of St. Kitts’ businesses and investors to Chinese markets such as construction materials among a long list of goods that are more expensive to get elsewhere.
The new Team Unity government elected in 2015 has also its shares of issues that undermine St. Kitts and Nevis’ Citizenship Programme.
Fake shares, future liabilities
Diving further down the rabbit hole, it has been exposed that the CIU has been offering fake shares that have robbed the country of an estimated $130 million USD.
In early 2019, news entities such as GulfNews, and GrenadaBroadcast have reported about the multiple allegations of apparent fraud in St Kitts and Nevis CIP. This involves forged letters of approval, fake shares, unmonitored switching from the donation option to the real estate investment option, misappropriation of client money into personal bank accounts, and illegally financed unsanctioned discounts.
All the compounded news about issues with SKN’s Citizenship by Investment Programme as well as the governing body, CIU, that was meant to police would-be violators, has resulted in doubts when acquiring passports from SKN.
What’s further alarming is that Prime Minister Timothy Harris himself has not found “anything suspicious” from the activities of the CIU as well as “anything fraudulent” from shares and projects under the banner of the country’s CBI Program.
“The CIU processes applications which on the face of the documentary evidence submitted to it had only the authorized amounts. There has been not one case that has come to [Khan] and his unit that the amounts that are indicated on the purchase and sales agreement were not authorized,” Harris said during a press conference in Dubai.
What it amounts to now is that new economic citizens are acquiring liabilities instead of assets. Furthermore, several of the new economic citizens might find themselves stateless even decades from now when the basis of citizenship is found to be fraudulent.
Potential New Income Taxes
In an article by Investment Immigration Insider, Prime Minister Harris hinted that he may solicit “support” from economic citizens of the country.
“In our view, this represents a significant resource to be tapped into for future investments, skills, experience, and humanitarian support for the advancement of our small country. Those who have been privileged to become our citizens and who are non-resident in St. Kitts and Nevis must now be tapped into, to assist us in making our country even more successful.” Our policy on the Diaspora must now address and include this very important resource,” said PM Harris.
The above statement published in 2018 has left an unanswered question: Does economic citizens were made aware, at the time of application, that they would in the future come to be a “resource to tap into”?
Enter 2020, the COVID-19 pandemic has further tightened the budget of St. Kitts.
Last month, the prime minister has said that the government expects EC$188 million (One EC dollar=US$0.37 cents) fallout in revenue.
The announcement has revived the issue of potentially tapping economic citizens as “resource”.
Will the government impose a new tax scheme applicable to economic citizen’s overseas incomes? This will be answered this month after the amendment of the SKN Income Tax Act.
About the Author:
Sofia Olson is an investigative journalist with over a decade of journalism experience covering socio-economic and human rights issues.
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