Citizenship by investment schemes – more than meets the eye?
No longer solely related to family heritage or place of birth, citizenship has now become a tangible commodity. This is possible due to citizenship and residency by investment (CRBI) schemes. First introduced by the Caribbean island of St. Kitts and Nevis, CRBI offers citizenship or permanent residency to foreign nationals in exchange for cash investments. Dubbed “golden visas,” these investment opportunities grant foreigners legal status in these nations. For the fortunate few, they provide individuals with real estate opportunities and visa-free travel to different countries, writes Louis Auge.
Valued at approximately $25 billion (£20bn) per year in 2019, this industry is on the rise. With the ability to stimulate the local economy, many countries were quick to implement St. Kitts’ measures. From Portugal to St. Lucia to the United States, CRBI is possible in many jurisdictions across the world. However, the minimum capital requirement, timeframe for approval, and visa-free destinations provided per country vary drastically.
Based on these requirements, leading consulting companies in the CRBI industry have consolidated most of their businesses in the Caribbean. With five countries offering CRBI in this region, individuals are quick to invest due to the region’s experience with CRBI along with their secrecy laws. With an investment as low as $100,000 individuals can get citizenship in countries such as St. Lucia, Antigua and Barbuda, and Dominica.
Proponents have been quick to defend the benefits for both the investor and the host country, but the morality of these schemes are questionable. Locals in rural villages within CRBI countries have yet to see the effect of these investments. With a tolerance for corruption, there are stories across multiple jurisdictions of politicians taking a cut of each visa payment.
By placing a price tag on their citizenship, countries risk becoming a haven for criminals. CRBI schemes have been associated with hallmarks of criminality from tax evasion to money laundering. The taint of questionable activities does not stop with the clients of CRBI schemes either. Firms specializing in setting up and facilitating CRBI schemes have never been far from scandal.
The actions of CRBI consulting companies such as Henley and Partners and CS Global Partners have been questioned on multiple occasions. Recently, CS Global, established by a former senior figure at Henley and Partners, faced allegations of interfering in Dominica’s 2015 election campaign, making donations to PM Roosevelt Skerrit’s successful run for the leadership. Both sides deny the allegation.
The recent media surrounding Gurdip ‘Dev’ Bath is a case in point. As the former director of CS Global, Bath is well versed in the CRBI industry. Bath has established strong relations with government officials across the Caribbean. Indian by background and ordinarily resident in London, Bath holds a diplomatic passport from St. Kitts, in a capacity that remains unexplained.
Additionally, he has close ties with Hardip ‘Peter’ Virdee, a businessman from London who has been willing to pay bribes according to the United Kingdom’s National Crime Agency. These relationships have tarnished his reputation as a self-described ‘diplomat.’ Bath has also been seen and had high-level meetings with senior Indian officials including the Prime Minister. His current role at CS Global, which specializes in CRBI in Dominica and St. Kitts, begs one to question his role in the company’s current Dominican scandal.
Unfortunately for Bath, his recent mentions across the media have taken a turn for the worse. Accused of planning and executing the recent kidnapping of Indian businessman Mehul Choksi, the scandal has the CRBI specialist caught up in alleged human rights violations.
Choksi was allegedly kidnapped from Antigua on 23 May 2021. Two days later, he was found in Dominica by local authorities. Arrested for illegally entering the country, Choksi currently awaits trial in Dominica.
Choksi and his lawyers point to evidence that he was kidnapped and taken to Dominica against his will. They have argued that Bath worked with the governments of Dominica as well as Antigua and Barbuda, possibly at the request of the Indian government, as part of a plan to bring Choksi to India, where he is wanted for charges of fraud.
In their report to the British police’s War Crimes Unit, Choksi’s defense additionally accused Bath’s associates Barbara Jarabik, Gurjit Singh Bhandal, and Gurmit Singh of being accomplices in Choksi’s kidnap and torture. Moreover, they note India’s apparent involvement, as a private charter jet containing documents regarding Choki’s extradition, was sent to Dominica from Dehli.
Bath’s case echoes that of Alireza Zibahalat Monfared, the ‘right hand’ of Iranian oil tycoon Babak Zanjani, convicted in 2016 of largest ever fraud to hit that country. After an international manhunt, Monfared was discovered and arrested in Dominica, where he too was living on a diplomatic passport. An Al-Jazeera investigation in 2019 showed how Caribbean nations offer ‘the protection or shield’ of diplomatic immunity to ‘international criminals’. The UK’s Geoffrey Robertson QC describes these programmes as an ‘international scandal’.
Henley and Partners, pioneers of CRBI schemes and closely associated with CS Global, suffered a reputational setback in 2021 when its email database was leaked to The Guardian newspaper. The leaks demonstrated how Henley helped clients to create a pretence that they were “resident” in the country for a full year by renting apartments and then leaving them empty. The company had previously come under fire in the Spectator magazine, which detailed Henley and Partners’ close links to Cambridge Analytica, as well as its involvement and potential interference in election campaigns in the Caribbean.
British MP Ben Bradshaw, speaking in Parliament in 2018, called on the UK government to support an investigation into the death of Maltese journalist Daphne Caruana Galizia. Bradshaw noted that the journalist, killed in a car bomb, was investigating Pilatus Bank, Cambridge Analytica and Henley and Partners at the time. Henley and Partners has strongly denied all of the allegations.
In response to these allegations, along with the discontent from Caribbean residents, one might question the future of CRBI. Will the industry clean up its image, dropping associations with secrecy and criminality, or will wealthier nations work to stamp out the practice? For nations like the US, UK and the Gulf states, these firms and their clients are associated with lower tax receipts, international fugitives and a constant drip of scandal. It may not be long before their patience runs out.