The Scandal of Citizenship by Investment


Life after “Citizenship by Investment”

What are we going to do with all the half-built hotels when the CBI money stops? And it’s stopping very soon.

CBI schemes offer purchasers a second nationality that gives them easy access to countries their native passports would not. Buy a passport from Grenada or one of the other four Eastern Caribbean states offering them and you will get visa-free access to 140-odd countries including the UK and the EU and you are eligible to apply for a visa to the US. The money you pay can finance the building of speculative hotels approved for this purpose and/or be paid into government funds.

Grenada’s Citizenship by Investment – Paradise or millstone

But the US and Europe have had enough of this back door entry to their countries for potential criminals, terrorists and money launders. Europe is closing down ‘golden passport’ schemes for all member states. Cyprus was one of the last countries to repeal its scheme, stop processing applications and revoke many of the passports it had sold. Brussels is taking legal action against Malta – the last country holding out (and the most corrupt) – and it too will cease its scheme shortly. The EU argues that, citizenship of any member state is also full EU citizenship with the right to free movement, access to the EU internal market, and the right to vote. “The inherent risks of such schemes have been highlighted in the context of the Russian aggression against Ukraine.”

Europe is making similar arguments against CBI schemes run by other countries including Grenada.  By purchasing a Grenadian passport, a Russian criminal can have visa-free access to the whole Schengen area of the EU. If Caribbean countries refuse to close their CBI schemes, the EU will stop those access privileges for all nationals of those countries and the US will make visas more difficult to obtain. Born and bred Grenadians will find their passports unwelcome and the days of lengthy visa application processes will return. Indeed they already have as Canada has reintroduced visa applications for Grenadians citing CBI scheme abuses and it is reported that the UK is screening all arriving passengers holding Eastern Caribbean passports looking for Russian nationals seeking entry via CBI passports.

A ‘No Travel for Traffickers Act’ has been tabled in the US Congress that will revoke a country’s eligibility for the US Visa Waiver Programme if it offers citizenship by investment schemes.  The European Parliament has resolved not only to stop EU countries offering CBI schemes but has also indicated that third countries must stop selling citizenship. It notes that these schemes are sold “with the express purpose of facilitating visa-free travel to the Union”.

On the property side, a hotel developer can get government to approve a planned development and then sell rooms in it to passport purchasers. You either pay around U$150,000 for a passport or around U$200,000 for a passport plus an apartment in a hotel development – yet to be built. And they mostly don’t get built. This is a recipe for a Ponzi Scheme of part-built hotel developments. Some developers have run off with the money and not built anything beyond wrecking the natural habitat. One Chinese developer given Grenadian citizenship is now languishing all expenses paid in a US jail, and the five biggest CBI-funded hotel schemes in Grenada are all in court. Yet they are being actively marketed by national and international CBI agents. Who do you sue if you bought into that? Well at least you got your passport. Or did you? Destination countries may well demand retrospective revocation of CBI passports especially if holders were originally Russian. How many Russians have been sold Grenadian passports? Government won’t reveal – until they are made to.

Countries offering CBI schemes all claim they have strict due diligence in place. They do not. They turn down hardly anyone and sting operations have shown that even fictitious criminals are given passports. The approval of hotel projects for CBI money is approval on the nod. Anything goes as long it’s called a hotel and the applicant is ‘nice’ to the relevant politicians. And there is no proper accounting for government proceeds from CBI – a big handy slush fund for politicians of governments already famous for lack of transparency. In Grenada last year, the CEO of the CBI Committee resigned reportedly “because of alleged interference in the conduct of the organisation by the Prime Minister, including seeking CBI qualification for applicants without due diligence being conducted.” His resignation was followed by that of the Chairman. In Malta, the investigative journalist looking into the CBI scheme “rife with cronyism, bribery, and kickbacks” was murdered for her efforts.  Dominica was actively marketing passports to Syria thus opening the door for Hezbollah terrorists into the UK and Europe. Although now ceased, terrorists with Iranian passports are still welcome. The most prominent international ‘fixer’ for CBI, Henley & Partners, was implicated in influencing elections in several Caribbean states collaborating with Strategic Communications Laboratories (SCL) run by Alexander Nix founder of Cambridge Analytica (remember them)?

Even before the door is finally closed on CBI schemes potential purchasers will be pulling out as they realise they may have their passports revoked, stand a good chance of losing their money in half finished developments and it will not be so easy to sell their property in the future because there will be few buyers if there is no passport advantage. So big hotel developments may stall for lack of cash. Concrete scars will be left on our beaches; mangroves and wetlands wrecked. Legal battles will ensue (as it has already over Kawana) that government will lose as it always does (most recently to the tune of U$63m over Grenlec) landing the poor Grenadian tax payer with more debt. So in the end what has CBI achieved apart from putting some money into some pockets? It has rubbished the reputation of Grenada in the eyes of reputable investors and priced land out of the reach of Grenadians who might have invested in modest tourism products more in tune with ‘Pure Grenada’. And the way in which CBI money into government has been handled ensures we have little idea of where it has gone.


Coral Cove Group