St. Kitts and Nevis’ citizenship by investment program is engulfed in a scandal involving rampant rule violations, use of forged documents, and fraud involving real estate escrow accounts.
The wary government is expected to respond with stringent measures likely to increase processing times for pending applications.
One of the oldest citizenship-by-investment programs in the world, St. Kitts and Nevis is popular among investors from all over the world.
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The program is significantly cheaper than options offered by countries like Malta and Cyprus, and the St. Kitts’ passport offers visa-free travel privileges to more than 130 countries.
Past Issues with the Program
Despite its popularity, the program has been plagued by concerns about credibility and overall quality of due diligence.
Canada revoked visa-free access to citizens of St. Kitts and Nevis, primarily due to security concerns regarding the program. A critical advisory issued by the US State Department also hurt the program’s reputation.
These concerns prompted the country’s top politicians and bureaucrats to repeatedly emphasize its commitment to proper oversight and thorough due diligence.
In such a scenario, news of immigration agents and local property developers misusing the escrow account facility available to applicants is bad news for both the program and its candidates.
The Latest Scandal
The escrow mechanism is a short-term trust arrangement where a third party becomes responsible for oversight of funds while the buyer and seller of the real estate finalize the deal.
Local media reports have highlighted instances of agents abusing this facility to help applicants qualify for citizenship with lower investments.
It is estimated that the government has lost between $30 million and $130 million through such fraud, committed over the past four years.
Growing Worries for the Government
For the government, reports of frauds are worrying for multiple reasons.
- It raises doubts over the program’s credibility.
- The government will have to review all applications processed over the past five years to identify and penalize fraud. It will, in all probability, be compelled to pause processing of pending applications until the escrow loophole is identified and rectified.
- This scandal is likely to have a cascading effect on similar programs offered by other Caribbean nations including Dominica, St. Lucia, and Grenada.
With all programs under the cloud, around 5,500 investors from all over the world face potential delays in qualifying for their second passports. The government has responded with assurances of more oversight on escrow accounts and stricter implementation of rules.
This scandal is likely to lend more weight to critics’ concerns about the global investment immigration industry.
Recently, a European Parliament Commission highlighted a number of issues ranging from national security risks to tax evasion and called upon countries, especially in the EU, to terminate such golden visa and economic citizenship programs.