CBI Due Diligence Matters – Financial Times PWM Documentary

CBI Due Diligence Matters – Financial Times PWM Documentary

The second chapter of the new documentary from the Financial Times’ publication, Professional Wealth Management (PWM), discusses why the Federation of St Kitts and Nevis is strict about who can and cannot apply to its Citizenship by Investment (CBI) Programme. The PWM Editor-in-Chief Yuri Bender, interviewed Les Khan, the Head of the country’s Citizenship by Investment Unit (CIU) to find out why due diligence matters.

“St Kitts and Nevis launched the world’s first citizenship by investment programme in 1984, shortly after gaining independence from the UK,” says Yuri Bender, Editor-in-Chief of Professional Wealth Management magazine from the Financial Times. “We’re here to see Les Khan, who heads up the government’s CBI Unit. We’ll discuss with him the application process for the Programme, and the benefits which it accrues for the country’s economy and for society as a whole.”

Yuri Bender: Les Khan, many wealthy families are looking for a plan B, just in case something goes wrong for them at home. What sort of attractions does your citizenship programme have for such individuals?

Les Khan: It offers them insurance. Insurance that if they have an ability or need to move, they can move very easily. It offers them the ability for their family to be educated in different parts of the world, even here in St Kitts where we have at least four universities, that provide higher education and are available to these individuals.

Also, business opportunities. A lot of people who have restricted passports cannot travel for their business. And as your business grows globally, which is the environment we are in, they need to be able to get from point A to point B. And a St Kitts and Nevis citizenship allows them that. […] If you look at our pricing for a single applicant, we are above the others. We’re at US$150K for our contribution. We wanted to be at a higher end and support our platinum brand, but, at the same time, make the product competitive to larger families, and I believe we have achieved that.

Yuri Bender: Your competitors are looking at China, at Russia, at the Middle East for new clients. Is it the same for St Kitts?

Les Khan: Russia [market] was a major contributor to our Programme, but with the advent of Malta and Cyprus and so on, a lot of the Russians’ applications went in that direction. We continue to have strong volumes coming out of both China and the Middle East.

Yuri Bender: The US has sanctions against Iran; Europe is a lot friendlier towards Iran. What is your attitude to people from that part of the world, from Iran for instance, who apply for citizenship?

Les Khan: Well, this current administration passed regulations [in 2013], which basically said that there are two countries we cannot do citizenship for. That’s Iran and Afghanistan [and, since June 2017, North Korea]. We will offer citizenship to any applicant from any other country around the world as long as we can do proper due diligence on the individual who is being processed by us. Now, having said that, correspondent banking now plays a part in this and the correspondent banks may have further restrictions based on sanctions by the US or otherwise.

Yuri Bender: Are there some cases where national economic interest might triumph over some security concerns?

Les Khan: I’ll be very frank: security concerns coming out of international law enforcement is a no-no for us – we will deny that individual. So if the due diligence is clear from our due diligence company, but it gets a red flag from our international law enforcement group, we will deny [granting citizenship by investment to that applicant].

Now, there are other reasons we will deny [granting citizenship]. For example, in St Kitts and Nevis, we have a regulation that says: if you have been refused a visa from a country that we have visa-free access to, then you will be refused by us.

Yuri Bender: The US Financial Crimes Enformecent Network issued warnings, coversations about St Kitts and Nevis in 2014. How closely are you working with them to address their 20 recommendations into areas such as banking standards and application processing criteria?

Les Khan: The 2014 FinCEN advisory was based primarily on the fact that [on] our passports at the time, the place of birth of the individuals were taken off. And, after some warnings to the government, it was recognised that, there was no corrective action taken there. So the FinCEN advisory came into effect. During that time, there was also work done by a consultant company [CS Global Partners] to make recommendations to improve the process. And those recommendations were taken in by the current administration and implemented. Obviously, there was a change in the administration in the US that had some impact on the timeline of things and we continue to have this dialogue, we continue to engage with them and we feel confident that, eventually, we will get the FinCEN advisory removed – the question is just timing.

US$150,000 for a Family of Four

On July 3rd, 2020, St Kitts and Nevis announced that it is introducing a limited time offer for families seeking second citizenship through CBI. Specifically, a family of four can now contribute only US$150,000, instead of US$195,000 to the Sustainable Growth Fund.

The offer is valid for the fund option only, which remains the fastest and most secure route to citizenship from St Kitts and Nevis. Effective immediately, the offer ends on December 31, 2020.

The reason behind introducing this is to cushion the economic blow caused by COVID-19, as seen across the world. From a health safety perspective, the Caribbean nation responded effectively to the pandemic, having registered no related deaths and only 15 cases, who made a full recovery.

For more information about St Kitts and Nevis’ new family offer, please contact CS Global Partners.

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