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  • ARTICLE - Global

    Citizenship and Residency by Investment Programs: Striking a balance?

    25 Nov

    Citizenship and Residency by Investment - Introduction

    In the landscape of global investment, Citizenship by Investment (CBI) and Residency by Investment (RBI) programs offer a compelling gateway for foreign investors seeking expedited citizenship or residency in other countries. These initiatives, while promising economic growth through substantial foreign investment, have a flip side. It is alleged that they've become a magnet for unscrupulous individuals—criminals and corrupt officials—who exploit these programs to evade justice and launder billions of dollars obtained through illicit activities.

    Who yer gonna call?

    The FATF team, of course. Recently, the Financial Action Task Force (FATF) teamed up with the Organisation for Economic Co-operation and Development (OECD) to delve into the risks and vulnerabilities of these programs in their joint project. Their findings underscored the inherent dangers associated with CBI/RBI programs, particularly in terms of money laundering, fraud, and their adverse effects on public integrity, taxation, and migration. FATF President T. Raja Kumar highlighted the dual nature of these investment schemes, acknowledging their potential for stimulating economic growth while underscoring the grave threats they pose when abused by criminals and corrupt entities. "Golden" passports and visas extended through these programs often fall prey to exploitation by individuals looking to obfuscate their identities, launder illicit gains, or perpetrate further criminal activities.

    The report

    The report illuminates how these programs offer criminals enhanced global mobility, enabling them to cloak their identities and illegal undertakings behind opaque corporate structures in foreign jurisdictions. Complex and multifaceted, these international investment migration programs frequently involve multiple government agencies, intermediaries, and lack proper governance, making them vulnerable to abuse by professional facilitators. OECD Secretary-General Cormann emphasized the alarming scale of exploitation within these citizenship and residency programs, characterizing it as a multi-billion-dollar enterprise utilized by criminals to launder the proceeds of fraud and corruption, evade accountability, or access third-party countries.

    Countering the threats

    To counter these threats, the report proposes a series of measures and best practices aimed at mitigating risks. It advocates for robust due diligence mechanisms, transparency, and integrity frameworks to be integrated into the fabric of these investment migration programs. Additionally, it stresses the importance of dissecting how criminals exploit these programs and delineates the need for clear demarcation of roles and responsibilities among involved parties to spot and prevent fraudulent activities.

    Citizenship and Residency by Investment - Conclusion

    In essence, while CBI/RBI programs offer a potential gateway to economic growth, their unchecked exploitation poses a severe threat to global financial systems and integrity. The onus lies on policymakers and administrators of these programs to adopt stringent measures, ensuring these schemes aren't hijacked for nefarious purposes. The report serves as a clarion call to establish a delicate equilibrium between economic prosperity and robust security measures within the realm of investment migration programs.   If you have any queries about Citizenship and Residency by Investment programs, then please get in touch.

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    MR BLAKEFIELD. REGAL CAPITAL. FLORIDA.

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    MR BLAKEFIELD. REGAL CAPITAL. FLORIDA.

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