Letters & Opinion

Come as a Visitor…Leave as a citizen

By: Stephen Lester Prescot

IN light of recent comments by the new Manager of the CIP Unit, I was forced to take a look at the 2015 CIP Act because I was trying to comprehend whether the new Manager was complying or breaking the law as it relates to the CIP reporting obligations.

Section 24 of the 2015 CIP Act, notes that the Prime Minister shall “no later than three months after submission [Annual Report] lay the same in Parliament” Information contained in the Report shall include “(a.)the number of applications made, granted and refused under the Act. (b)the names, addresses and nationalities of successful applicants and any qualifying dependents (c) the amount and other details of investment”. Therefore according to the Law, the PM has a duty that he has not yet honoured although two financial years have passed since the establishment of the CIP Unit. In failing to report, no one is the wiser in terms of what is going on with CIP, in terms of who has our passports and just as importantly how much income was collected and how the CIP revenue is being used.

I have never supported a Citizenship by Investment Programme for St Lucia; however, I recognized the role it could play in diversifying our economic landscape. I accepted that if a country’s CIP investment is used correctly it could play an integral part in development projects and real estate. A scan of our OECS neighbours, St Kitts, Grenada, Dominica and Antigua illustrated how these territories benefited directly from CIP in real estate, housing projects and improving overall GDP. In fact even the IMF in February 2017, offered advice to the Allen Chastanet Administration on the use of CIP revenue. According to their Concluding Statement of 2017 Article IV Mission:

“CIP revenues should be used primarily to reduce debt, and limits should be placed on amounts used to finance high-priority expenditure. After receiving relatively few applications in 2016, the authorities expect that the recent easing in the requirements and lowering of the costs to qualify for this program will encourage an increase in revenues. To minimize the risks of fiscal dependence on these revenues, which can be volatile and subject to sudden stops, and to reduce the impact of globally rising interest rates on public finances, priority should be given to amortizing existing debt. A capped amount could be used for investment projects of primary importance if public investment management can be strengthened further to ensure high quality investment. Transparency, appropriate governance, and careful due diligence remain paramount to reduce risks of sudden stops.” I am not convinced that this administration is paying any attention to this opinion but…

CIP was established in 2015, under the Labour administration. Again, a review of Section 7 of the 2015 Act notes there was an annual cap of 500 applications for citizenship allowed by the Board. Interestingly too, one had to declare through affidavit that they had a net worth of at least US$3 million to be considered. I assume this clause was to ensure that St Lucia could attract people who had real and not imagined financial resources. The CIP Regulations of 2015 had the price set at US$200,000 for donations for applicants alone and US$235,000 for applicant with spouse. When the UWP administration came in, the regulations were amended in four critical areas.

The UWP administration by Statutory Instrument No.1 of 2017 deleted the 500 maximum applications for the Board and also deleted the requirement for an applicant to submit affidavit to declare US$3 million. According to the changes announced by Government effective January 2017, the qualifying contribution for an applicant for St Lucia citizenship is now US$100,000 or half what it was when the programme was announced at the beginning of last year. For an applicant with spouse the qualifying amount has also been reduced to US$165,000 from the original US$235,000.

Measures that would enforce transparency, due diligence and accountability were deleted, one therefore wonders if these types of changes had any correlation with St Lucia finding itself on a blacklist last year. But the UWP Government also provided an option for successful applicants to sign declarations of allegiance outside of St Lucia. Among Caribbean citizenship by investment programmes, exhaustive due diligence is a factor that every one promotes as being of the utmost importance. Yet the UWP government removed the 500 cap altogether. Instead, they are allowing ‘as many people as possible’. They removed the net worth minimum, and it isn’t mandatory to visit St Lucia before getting documentation. The reality readers is that these programmes can be exploited by tax evaders, terror financiers, drug cartels and these programmes are not without their international challenges with regards to transparency and due diligence processes. So what would prompt the PM to lower our standards?

The Prime Minister claims to be making St Lucia more competitive with CIP yet fails to understand the lower barriers to entry offered by St Lucia will affect the sustainability of this programme because of the inherent reputational risks to us if applicants are not thoroughly vetted and also the implications for loss of visa-free access to places like Europe if we were to unknowingly facilitate international crime through unworthy persons having our passports. The Government of St Lucia appears to have a cavalier attitude towards citizenship safekeeping and protecting the integrity of our passport. They don’t seem to care that ours is referred to as one of the cheapest which undermines the programme exclusivity while we race to scrape the bottom of the barrel.

Prime Minister, this is not the reputation that we want, the citizenry urges you to adhere to the rule of Law and report to the nation on the status of the CIP.

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