Greetings from the island of Nevis! I’m here dealing with yearend formalities associated with Fortress Trust Ltd., a registered agent for Nevis trusts, LLCs, and IBCs.
One of the benefits of having “boots on the ground” offshore is that you have the benefit of speaking to local residents, listening to local radio, and reading local newspapers. Even in this hyper-connected age, these information sources aren’t always on the Internet. And in the Federation of St. Kitts & Nevis, passports – specifically the country’s Citizenship-by-Investment program (CIP) – are on everyone’s mind.
The Federation’s CIP is the world’s oldest. Yet, in recent years, it’s come under attack. In May 2014, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) warned banks worldwide to apply special scrutiny to citizens of St. Kitts & Nevis. According to FinCEN, certain individuals are “abusing” the program “for the purpose of engaging in illicit financial activity.” Supposedly, the program “is attractive to illicit actors because the program, as administered, maintains lax controls as to who may be granted citizenship.”
“Illicit actors” is a code phrase for “terrorists.” Specifically, “Iranian terrorists.” FinCEN says that on several occasions, St. Kitts & Nevis issued passports to Iranian citizens on a “blacklist” compiled by another Treasury agency, the Office of Foreign Assets Control (OFAC).
A few months later, Canada announced that effective immediately, it would require citizens of St. Kitts & Nevis to obtain a visa before visiting the country. It cited “identity management practices within its Citizenship by Investment program” as the reason.
Naturally, the government of St. Kitts & Nevis didn’t view this development favorably. It’s been lobbying Canada ever since to lift the restrictions. Indeed, the local media reports that when Canadian Prime Minister Justin Trudeau and his family visited Nevis recently, the prime minister of St. Kitts & Nevis lobbied him to lift the visa restrictions. The political price for Trudeau would almost certainly be too steep for him to make this commitment.
Higher Stakes of Stolen Passports
After all, the stakes involved for individuals using passports that were stolen, forged, or issued with lax controls are higher than ever. For instance, in the wake of the Daesh (otherwise known as Islamic State, or ISIS) attacks on Paris last November, reports surfaced that the attackers had entered the EU using stolen or counterfeited Syrian passports.
It’s well known among refugees that Syrian passports are particularly valuable, because numerous EU countries – especially Germany – give precedence to asylum seekers who carry Syrian passports.
What’s less well known, though, is that literally millions of EU passports have gone missing in recent years. That’s not a misprint – millions is the correct word.
Indeed, according to reports from Sweden’s Interior Ministry, in 2013 alone, nearly 900,000 passports went missing from just four northern European countries:
- Germany 477,000
- Denmark 195,000
- Sweden 177,000
- Finland 44,000
Again, these figures are for just one year. According to Interpol, almost 40 million “travel” documents were reported as lost or stolen between 2002 and 2013. Of course, not all of these missing passports are from the EU. And the vast majority of the individuals purchasing these documents weren’t terrorists but individuals fleeing conflict zones in Syria and other countries, or simply seeking a better life in another country. Still, these numbers are staggering.
However, evidence suggests that Daesh and other groups are using counterfeit EU passports to infiltrate Europe. In December, police in Kosovo arrested seven men and seized hundreds of fake EU passports and other EU identity documents. Further, in recent weeks, dozens of Syrians have been apprehended in Central America and Caribbean countries carrying fake Greek passports. It’s not that expensive, either. The asking price for a fake Greek passport in the back alleys of Athens is a mere €3,000 – about US$3,300.
The Excellent Value of Passports
Keep in mind that a fraudulent passport doesn’t simply convey a new name and identity for the person using it. It also conveys the appearance of citizenship in the country supposedly issuing the passport. In the case of an EU passport, it also grants the bearer all the rights and privileges of EU citizenship. A person carrying a German, Danish, Swedish, or other EU passport can cross every border in most of Europe without further screening.
Further, that person also has the right to enter the US, Canada, and over 100 other countries visa-free, with only a cursory background check. If I headed up FinCEN, I might issue an Advisory warning banks to apply special scrutiny to individuals identifying themselves with an EU passport. And if I was Donald Trump, I might advocate suspending visa-free access to the US from EU countries.
Politically, these initiatives may be inevitable. And that in turn is likely to significantly reduce the value of an EU passport. Conversely, they will boost the value of non-EU passports, notably the handful of Caribbean countries that offer citizenship and passport through a qualifying contribution or investment.
Even the worst detractors of the Caribbean CIPs have never suggested that passports from these countries are being stolen by the millions and used by Daesh and other terror groups. Indeed, the sanctions put in place by the US and Canada have forced the countries in this region with CIPs to be extra vigilant in evaluating candidates for citizenship.
What to Do
If you’re a US person seeking a second citizenship and passport, what should you do in light of these revelations?
First, realize that it’s more important than ever for US persons to acquire a second passport. Remember, the State Department must now revoke your passport if you have a “seriously delinquent tax debt.” If that happens, you won’t be able to leave the US. And if you live outside the US, you won’t be able to leave that country. Indeed, without a valid passport, you might even be deported to the US. Not to mention the need to possess a second passport “just in case” a newly elected president turns the country into a totalitarian hellhole.
Second, understand that the stolen EU passports crisis makes CIPs in the EU less desirable. Sure, if you qualify for an EU passport by virtue of your Italian or Irish ancestry, for instance, it’s still worth filing the paperwork to acquire these documents. On the other hand, purchasing Maltese citizenship in return for a €650,000 contribution, with total costs exceeding €1 million, isn’t as attractive as it once was.
Italian Citizenship by Descent: An Authoritative Guide
A virtually free second passport? Sounds almost too good to be true. And yet Italian Citizenship by Descent is exactly that. Find out if you qualify.
In contrast, in the Commonwealth of Dominica – our preferred Caribbean CIP – a single applicant can acquire citizenship and passport for a total outlay of less than $140,000. Add another $80,000 or so for your spouse and up to two children under the age of 18.
But you might want to hurry. Higher prices come into effect in August 2016.
The Nestmann Group is the only US company licensed by the Commonwealth of Dominica to offer the citizenship-by-investment program. Over the years, we’ve handled nearly 100 applications for Dominica citizenship and passport.
If you’d like to know more about this option, we’ve prepared a free special report on Dominica. To reserve your copy, as well as access a special offer for a one-on-one consult with me about all things Dominica – well below my normal rate – just follow this link.
Mark Nestmann
Nestmann.com
