Episode 2

S.3 EP.2 – Due Diligence: The Cornerstone of Citizenship by Investment

Due Diligence: The Cornerstone of Citizenship by Investment

We welcome Annika Soderlund to Plan B today! Annika is a legal assistant at CS Global Partners and she will walk us through the details of Dominica and St Kitts and Nevis’ due diligence procedures.

Dominica & St Kitts and Nevis’ Due Diligence Cornerstone
On today’s show we welcome Annika Soderlund, one of the legal assistants at CS Global Partners. Annika will walk us through the details of Dominica and St Kitts and Nevis’ due diligence procedures.

Aisha Mohamed: Why is due diligence so important to the CBI Programmes of Dominica and St Kitts and Nevis?

Annika Soderlund: ‘Due diligence,’ in this context, refers to the vetting of CBI applicants to determine whether they are suitable candidates for second citizenship. A strict approach to due diligence protects the Programmes, the people, and the international partners of Dominica and St Kitts and Nevis from illicit actors. Having a strong system of due diligence is essential to the national security of both countries. It also plays an important role in shaping both countries’ relationship with their international partners. The fact that other countries trust Dominica and St Kitts and Nevis to thoroughly vet applicants is reflected in the growing number of countries to which citizens of Dominica and St Kitts and Nevis may travel without a visa. As well as protecting the reputation of the Programmes, implementing a system of robust due diligence means that applicants can be sure they are making a quality investment as their new citizenship is, and will continue to be, highly regarded worldwide. To summarise, due diligence is undoubtedly an important aspect of a robust CBI programme because the integrity of a CBI programme is vital to its reputation and attractiveness to applicants. It is through advanced due diligence that the CBI Programmes of Dominica and St Kitts and Nevis remain highly reputable and ensure compliance with the highest industry standards. Also Read: A Citizenship by Investment Programme’s Due Diligence Has Direct Impact on its Longevity

AM: What due diligence checks are the applicants subject to? (in DOM and in SKN)

AS: The due diligence process is multi-layered and starts with the Programmes’ Authorised Agents/Authorised Persons, who submit applications to the respective Citizenship by Investment Unit. Authorised Agents/Persons are required to undertake ‘Know-Your-Client’ processes and must submit their KYC report to the Unit along with each citizenship application. As part of their application, applicants must obtain various documents proving their identity, moral character, health, and source of funds. Each of these documents must either be submitted in original form or via a certified and legalised copy. Upon submission of an application to the respective Unit, internal vetting by Unit staff (who are trained in anti-money laundering, anti-terrorism financing and document review) commences. The Units also cooperate closely with international due diligence agencies and regional and international law enforcement bodies. Applications are forwarded to mandated due diligence agencies operating in specific regions which perform both online and on-the-ground reviews of applicants, their families, and their source of funds. Additionally, applications are forwarded to international and regional law enforcement agencies including Interpol and the JRCC. Due diligence is always evolving, and, in the near future, applicants may be subject to biometric testing as part of the comprehensive due diligence procedures. Also Read: How To Start Your Citizenship by Investment Process

AM: Because this vetting process is quite extensive, do you think it presents as a deterrent for busy high net worth individuals?

AS: While it is true that the vetting process is extensive, the citizenship by investment process remains straightforward for applicants. This is because the bulk of the due diligence process takes place away from the applicant and the burden is placed on the governments and their international and regional partners. Additionally, during the document gathering stage, applicants have highly experienced agents to guide them step-by-step through the process and respond to any queries they may have. Dominica and St Kitts and Nevis do not compromise when it comes to due diligence as the extensive vetting process has wide-ranging benefits for the individual applicant and the global community. Also Read: Due Diligence Tops the List in Maintaining CBI Integrity

AM: Does this commitment to due diligence ever entirely exclude anyone from applying to the CBI Programmes of Dominica and St Kitts and Nevis?

AS: There are many red flags that will immediately exclude a person from the Programmes of Dominica and St Kitts and Nevis. Obvious ones are a criminal record or one’s name on a sanctioned-person or wanted list. Less obvious ones include reputational risk concerns or an unclear source of funds. Additionally, no person can obtain economic citizenship of Dominica or St Kitts and Nevis if they have a visa denial from any of the countries to which citizens of Dominica or St Kitts and Nevis have visa-free access. Where an applicant has been denied a visa to one such country, that applicant must subsequently obtain a visa to, or a residence permit in, that country to be eligible for economic citizenship. Finally, both Dominica and St Kitts and Nevis bar individuals of certain nationalities from applying altogether if on-the-ground due diligence cannot be adequately performed in those countries. In Dominica, people from North Korea, Sudan, and Iran are barred from applying, except if they (1) have not lived in these countries for at least ten years, (2) have no substantial assets there, and (3) have not performed any business or similar activity in or with these countries. In St Kitts and Nevis, applicants from Afghanistan, Iran, and North Korea are barred from applying. AM: Dominica is a vocal advocate of a coordinated, Caribbean-wide due diligence and transparency effort. What exactly does this mean? AS: Dominica is an advocate for greater collaboration between Citizenship by investment countries when it comes to due diligence. I mentioned that CARICOM’s JRCC is one of the regional law enforcement agencies involved in the due diligence process of Dominica and St Kitts and Nevis. Well, the JRCC provides an additional shared layer of due diligence between all five Caribbean CBI programmes. Another example of a coordinated approach to due diligence is that all Caribbean Citizenship by investment nations protect international open borders by mandating the rejection of applicants who have been denied a visa to any of their visa-free travel destinations. In the future, collaboration might extend to adopting similar disclosure forms, and sharing information on applicants, although an exact framework for these changes has yet to be fully explored. Coordination among the Caribbean member states is only one component of how countries like Dominica commit to international safety and transparency. Dominica, for example, publishes the name of every successful applicant quarterly in its official gazette. Dominica also ensures that funds received through the Programme are itemised in the National Budget – so anyone can see how CBI money is being spent. In 2019, Dominica invited experts from PwC to audit the Programme and the findings were published publicly. Also Read: What to Consider When Choosing a Citizenship by Investment Programme This interview has been edited and condensed for length and clarity.