Following a landmark meeting with representatives of the US Government on 25 February 2023, the ‘Caribbean Five’ agreed to the implementation of Six Principles to safeguard and regulate their Citizenship by Investment (CBI) programmes.

The ‘Caribbean Five’ agreed to six significant stipulations to their respective CBI programmes earlier this year. We define the Six Principles below and examine how their implementation is reshaping the CBI industry.  

On 25 February 2023, St Kitts and Nevis hosted the historic US-Caribbean Roundtable on CBI. Representatives of the US Government met officials of all five Caribbean CBI countries (Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and Saint Lucia). 

The conference aimed to reach mutual agreement on a solution that addressed security concerns while preserving the programmes and allowing them to continue to operate more sustainably.  

The US also accepted that dismantling these programmes would severely compromise the prosperity and prospects of the countries, triggering a plethora of negative social consequences domestically and potentially leading to an upsurge in criminality, among other pathologies.  

Nevertheless, the need to preserve these CBI programmes must also be reconciled with the countries’ commitment to safeguarding their financial systems against potential security threats. 

As a result, all five Caribbean CBI countries reached agreement with the US to implement six important measures that are expected to significantly strengthen the security and integrity of their CBI programmes. 

The agreement to the Six Principles demonstrates the US’s recognition of the value of CBI programmes to these small island states and the Caribbean CBI countries’ commitment to preserving the integrity of their CBI programmes. The six CBI principles are also a significant developmental reflection of all parties’ efforts in striking a fair balance between the value of CBI programmes and the security concerns associated with the CBI industry. 

The US team recognised the importance of CBI programmes to smaller countries as part of their development, stating that: 

CBI revenues are invaluable for funding major infrastructural and development projects, and for building resilience. 

The agreed Six Principles are as follow:

  1. Collective agreement on the treatment of denials: By proactively sharing information on denials and to not process applications from individuals who have had previous applications denied in other CBI jurisdictions. 
  2. Interviews: Conduct interviews with applicants, whether virtually or in person.
  3. Additional checks: Each jurisdiction is to run checks on each application with the Financial Intelligence Unit of its respective country.
  4. Audits: Audit each CBI Programme annually (or at least every two years) in accordance with internationally accepted standards.
  5. Retrieval of passports: Acquire assistance from law enforcement to retrieve revoked/recalled passports.
  6. Treatment of Russians and Belarusians: Suspend processing applications from Russians and Belarusians. All five jurisdictions have already implemented this change. 

Response by Caribbean CBI nations on the Six Principles

Several CBI countries are already showing their commitment to upholding the integrity and reputation of their CBI programmes by promptly implementing additional measures to strengthen the programmes’ due diligence and vetting processes. Robust due diligence systems have emerged in the Caribbean jurisdictions, a process that is often underestimated for the level of scrutiny applicants must undergo to acquire alternative citizenship. 

In July 2023, we witnessed significant proactivity by the top two ranked CBI programmes to tighten their programme requirements. Dominica trailblazed the industry by being the first of the Caribbean five to introduce mandatory interviews for all applicants aged 16 and over. They also added enhanced due diligence requirements for certain high-risk nationalities. Less than a week later, St Kitts and Nevis enacted a whole new set of regulations. They made sweeping changes to their CBI Programme to further enhance and solidify the reputation and integrity of its premium standard
CBI Programme. 

These measures include increased minimum investment thresholds, revised dependant eligibility, introducing promotional guidelines, strengthened monitoring and compliance requirements for
licenced local and international agents, and legislating the mandatory interview as part of the due diligence process. 

In 2023, we saw several members of the global community transition from a scrutinous to a collaborative attitude towards the Caribbean CBI industry. The current sentiment seems to be that
the EU and the US have come to recognise the value of CBI programmes to the economies of these small island states, and in return, these countries continue to display their commitment to upholding the integrity of their CBI programmes by implementing further measures to alleviate their international partners’ security concerns. 

Agreements reached at the US-Caribbean Roundtable conference will hopefully set the CBI industry on a strong trajectory forward as it enters an exciting era of growth with the support of the global community.   

CBI is a win-win solution for both investors and CBI-offering countries. Unsurprisingly, CBI’s numerous benefits make it a popular investment option for high-net-worth-individuals (HNWIs).  

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