It has been over a year since my article entitled "Passports for Sale! (Part 2)" appeared on mondaq.com and disappeared to other websites.
During this time, any doubt over the title and its reflection of the facts regarding Citizenship by Investment have been totally washed away by an avalanche of advertisements and promotional material, printed articles and television programs.
Passports have become a commodity.
From representing a nationality to which the passport holder belongs and to which he or she pledges allegiance, a passport has become an object of political and economic convenience.
Like any other monetised objects, passports are compared and contrasted by mundane, pragmatic categories: the benefits that can be derived, their ease of approval and the degree of vetting required, the cost involved, and the status obtained.
Shopping around for a passport will inevitably bring the shopper to the Caribbean.
The Dominican Republic and St Kitts-Nevis were the early proponents of such a programme.
St. Kitts-Nevis still leads the Caribbean in the number of passports sold.
Catching up with them, however, is Antigua & Barbuda.
The recent CBS segment "Passports for Sale" aired on its documentary program "60 Minutes", spoke to the ease of obtaining these documents that allow access to numerous countries which could otherwise be restricted and the convenience which multiple citizenship provides anyone who prefers confusion to scrutiny.
According to the website of Henley & Partners, which claims to have advised numerous governments around the world, "Citizenship-by-Investment programs offer you the opportunity to legally acquire a new citizenship quickly and simply, without any disruptions to your life."
In that regard, Antigua and Barbuda has established some of the easiest and least expensive criteria to qualify for citizenship.
The initial requirements for residency and financial investment began to slip from the inception of the program in late 2013. Following the elections in 2014, one of the first changes brought about by the new Prime Minister, Gaston Browne, was the lowering of Antigua's residency requirement for citizenship buyers from thirty-five days over five years to five days over five years.
"It was an issue of competition," he explains. "Antigua settled on five days of residency as a compromise so there will be some familiarity with the destination. We don't want it to appear as just a vulgar sale of passports."
Indeed, part of the presentation given by the Prime Minister, described by Jason Glenfield in the March 2015 issue of Bloomberg Markets Magazine, starts out as follows: "Gaston Browne, the Prime Minister of Antigua and Barbuda, starts his sales pitch with a geography lesson for all would-be-citizens who might have trouble finding the country on a map". Presumably, five days of residency over five years will teach new citizens all they need to know about their new country.
As a further point against competition, Antigua also cancelled plans to publish the names of the passport recipients. Only Malta provides such anonymity
The price of these documents has come down considerably since the initial sale of the first passport sold by Antigua in 2014. Furthermore, the original process and designated account into which these funds were to be deposited has now been "simplified": Among other changes, payment is no longer made directly into the Treasury or the National Development Fund, but can be "tied into a specific project." (The Daily Observer, December 28, 2016).
Appropriate noises are being made by the Deputy CEO of the Antigua & Barbuda Citizenship by Investment Unit in his statement that "money deposited into real estate and business investments from CIP applicants are also difficult to track as the funds do not go to the Government of Antigua & Barbuda".
With the official excuse now in place, this is not likely to change anytime soon.
From the beginning of the Citizenship by Investment Programme in Antigua, passports were packaged as Bonuses for multiple financial transactions.
In early 2014, a block of 120 passports was handed to the principals of Fancy Bridge, a Chinese company, for US$200,000 each, in return for investment funds to take over and expand the West Indies Oil Company. When confirming this transaction, PM Browne added that Fancy Bridge had been recommended to the Government of Antigua & Barbuda by Xiao Jianhua, an apparent Chinese billionaire, who has subsequently been appointed by the PM as Ambassador-at-Large for Antigua & Barbuda.
It is curious that no information is currently available on any Chinese company bearing that name.
The recent "60 Minutes" episode reminded listeners of another "packaged sale" making the news in 2015, in which a developer in the United Arab Emirates promoted the sale of condominiums known as "Sweet Homes" by including the option of an Antiguan passport in the transaction.
This episode is well documented.
Currently, Canadian Replay Resorts, Inc. is actively promoting an investment package for their projected development of the Half Moon Bay Resort, by including an Antiguan passport for each investor and his family with a promise of return of the cost of said passport within 4 years of the investment made. It is not surprising that this promotional material is available both in English and Chinese.
It is a matter of conjecture as to who benefits by the funds so raised. In this case, has the purchase of a block of passports been included in the sale of the Half Moon Bay property, or is this Replay paying the Government a certain portion of the sale price? Gaston Browne's announcement published in The Daily Observer on October 1st 2016, does not provide any clarity on this issue:
Prime Minister Gaston Browne said the Antigua & Barbuda Labour Party administration had to help the investor group Replay Resorts raise funds to purchase the Half Moon Bay property from the government.
"We had to do something very creative which I shall not make public, certainly not at this time, to help them to raise US $13 million of the US $20 million to purchase, or at least to pay out to Half Moon Bay," Browne said.
"It's not that Replay has millions or tens of millions of dollars to put into a hotel, they intended to fund it under the CIP (Citizenship by Investment) which means the progress may not even be as fast as we anticipated."
In any case, passports have become a common and fluctuating currency.
They are also becoming a matter of style and of status.
In his interview for "60 Minutes", Christian Kalin, a principal in Henley and Partners, suggested that "a rich person" is likely to have a number of credit cards, specific to his life style. In today's environment, that same person is equally likely to have a number of passports, specific to his travel requirements.
Of course, the highest level of status -- and the one associated with the highest level of international danger -- is the proliferation of Diplomatic passports and to a slightly lesser extent to the issue of Official passports.
Generally, it is expected that diplomatic passports are only issued to ministers, ambassadors, and high ranking diplomats whose bona fides are well established. However, there has been an increase in their use by certain countries to place economic envoys and representatives "in a stronger position of legitimacy". Antigua and Barbuda are clearly listed among such countries.
In addition to increasing the status of the bearer, Diplomatic and Official passports offer entry into many more countries, automatic streamlined immigration travel, and remove customs requirements, allowing luggage and personal possessions to travel without scrutiny.
Such official diplomatic courtesy can have a chilling effect on those whose mandate is the protection of the traveling public.
With little transparency and no safeguards in place, with programmes requiring little or no residency, that are not time limited or irrevocable in the event of a change of political administration, Deputy Director of the Western Hemisphere Department of the IMF, Adrienne Cheasty urged countries with existing CIP's to use the programmes' profits wisely before they become obsolete.
In the meantime, it is "full speed ahead". As aptly described in Nicholas Shaxton's "Treasure Islands", the industry feeds into a culture of corruption in poor countries that make a business of ignoring their own laws.
"These smaller jurisdictions haven't got anything to sell besides 'we'll let you do anything you want," he says.
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