The move by the British home secretary, Suella Braverman, to impose visa restrictions on people from Dominica, Honduras, Namibia, Timor-Leste and Vanuatu has reflected again the tendency to employ a sledgehammer to crack a nut when managing immigration and border security.
In July, Braverman expressed concerns about the way Dominica and Vanuatu administer their citizenship by investment (CBI) schemes – so-called golden visas – citizenship in exchange for financial inputs in the host country.
According to her, these two Commonwealth countries have been conferring citizenship on individuals recognised as security risks to the UK. Braverman failed to identify these dangerous people.
Her decision has been met with scepticism. Critics contend that the numbers involved in these countries are scarcely large enough to warrant such measures. The move appears to disproportionately target black and brown-majority nations, raising concerns again about the justice in Britain’s immigration policies.
Against a backdrop of anti-migrant sentiment, the step aligns with the UK government’s normalising of restrictive immigration policies, distracting from the cost-of-living crisis, public transport strikes, NHS issues and economic inequality. The focus on externalising immigration challenges ignores migration as an issue that requires a more thoughtful and comprehensive approach.
It also prompts a closer examination of citizenship by investment schemes. Transparency International, a global civil society organisation that campaigns against corruption, has previously highlighted problems in Europe, stating: “Golden passport and visa schemes have turned EU citizenship and residency rights into a luxury good: with enough money, anyone can buy in.
It adds: “This is a particularly attractive prospect for criminals and the corrupt – and numerous scandals have proven they are taking advantage. These EU golden passport and visa schemes are not about genuine investment or migration – but about serving corrupt interests.”
The problem is insidious in the Caribbean, which has become a magnet for members of super-rich elites from the US and Europe seeking to take advantage of vulnerable nations to satisfy their need to create more wealth at the expense of the climate crisis, human rights and equality.
Golden visas have gained traction in Caribbean islands, especially those heavily dependant on tourism and foreign direct investment.
Advocates argue that CBIs can stimulate economic growth, create jobs and benefit local economies and infrastructure. Attracting overseas investment can provide valuable sources of funding for public services and development, benefiting both citizen and immigrant, and countries can diversify beyond tourism and agriculture. But they come with their own set of challenges.
They often require property investment, which can bolster real estate markets but exacerbate wealth inequality, catapulting house prices beyond the reach of local people. Providing privileges to the wealthy deepens the divide between elites and locals.
This is especially true for countries belonging to the Organisation of the Eastern Caribbean States – Antigua and Barbuda, St Kitts and Nevis, Montserrat, Anguilla, British Virgin Islands, Dominica, St Lucia, St Vincent and the Grenadines, Grenada, Martinique and Guadeloupe.
Reports from the International Monetary Fund show CBIs contributed nearly 30% of GDP for Dominica and 25% for St Kitts and Nevis in 2022. Citizenship scheme income helps to support hospitality, infrastructure, banking and youth development projects. CBI revenues have been pivotal in aiding these countries during Covid.
However, without robust background checks and enhanced due diligence, the risk of corruption, money laundering and illicit activities increases. The rush to attract foreign investments can make economies more vulnerable to external economic shocks and national security concerns.
A report last year by the Organised Crime and Corruption Reporting Project highlighted one of the best-known firms enabling these passport sales, Henley & Partners, whose chairman, Christian Kälin, has been dubbed the “Passport King”. The report illustrated the number of CBI applicants from countries including Russia, Iran, United Arab Emirates, Armenia and Nigeria attempting to gain citizenship in Antigua and Barbuda and St Kitts and Nevis.
Golden-visa holders are often subject to tax in the host country. Income, property and other taxes bring other revenue streams. Tax evaders have ingeniously employed CBIs to obscure financial misconduct. Essentially, these individuals exploit tax havens to evade their obligations, relying on the host’s cooperation to reduce discovery risk. A key complicating factor is the acquisition of foreign citizenship as a safeguard against detection, a strategy favoured by the wealthiest tax evaders.
CBIs wield a transformative influence, redefining tax evasion in two ways: by reducing detection, thereby curtailing potential penalties from high-tax jurisdictions, and disrupting the international framework of tax information exchange, diverting potential revenue. This allows countries offering golden visas a discreet influence over global tax information-sharing initiatives.
The privileges conferred by investment visas vary significantly from country to country and even within programmes in the same nation. Generally, golden visas are premised on a significant financial investment, but specific rights and limitations can differ. Some convey rights to work, start a business or give access to services such as healthcare and education.
Some countries require a period of residency before granting voting rights, while others might not offer them at all to golden visa holders. This has led to controversy in the Caribbean where there have been allegations of using citizenship by investment for electoral manipulation.
The retired supervisor of elections in St Kitts and Nevis, Elvin Bailey, expressed concern that CBI holders were being allowed to vote. It has also been reported that a large number of Indian nationals, who are also Commonwealth citizens, and Chinese nationals, have been granted CBIs in St Kitts and Nevis that confer voting rights and ultimately allegiance to whichever administration dispenses these visas. Some were found to be involved in corruption and criminal activities.
Caribbean nations need to strike a balance between attracting investment and safeguarding their interests. In implementing robust procedures, including criminal background and funding source checks, they can ensure that those seeking these visas are genuinely contributing to society, and maintain the credibility of schemes.
Braverman’s approach to immigration raises questions about the UK’s commitment to equitable policies. Meanwhile, the Caribbean’s investment visa programmes offer economic opportunities but need to to address due diligence concerns related to inequality, alongside fraud, tax evasion and national security.
As the world grapples with issues of migration, corruption and governance, it becomes paramount for countries to wield more nuanced approaches to immigration, not the blunt force of sledgehammers.
• Kenneth Mohammed is a Caribbean analyst with a focus on corruption
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