Minister of Finance Camillo Gonsalves says that citizenship-by-investment (CBI) programmes such as those being run by the four other independent Organisation of Eastern Caribbean States (OECS) nation are a loophole and not a niche.
He said St. Vincent and the Grenadines, under his Unity Labour Party government, remains philosophically opposed to CBI, also known as economic citizenship.
But Gonsalves said that his government remains also opposed to CBI because it represents a financial loophole rather than a niche.
“Mr. Speaker, the important thing we have to say on this matter is that there is a difference between a niche and a loophole. I’ll say it again. There’s a difference between a niche and a loophole.
“And we all accept, and the Honourable Member for Central Kingstown said earlier today that we have to look for niche industries. We are a small country and I accept that and I support that and I promote that. We have to find niches. But a niche is not a loophole, because a loophole can close on you and when a loophole closes on you, you are left holding the bag.”
Gonsalves was responding to a question from Member of Parliament for Central Kingstown, St. Clair Leacock, an opposition lawmaker.
Leacock said that the government has rejected CBI, which he described as “this large revenue stream” even as it annually budgets for millions of dollars in loans, all of which, the opposition lawmaker said, “could have been financed from this new established sustainable source of income without being a burden on our taxpayers”.
But Gonsalves said that CBI programmes are unsustainable, noting that Grenada suspended their programme after 9/11 because they were concerned about “the type of persons they were giving citizenship to”.
The minister further said that the International Monetary Fund speaks of the very high sudden-stop risk related to the rapid changes in advanced countries’ policies.
Essentially the IMF is saying that any moment the rug can be pulled under a country with a CBI programme, Gonsalves told Parliament, reading from the IMF working paper, “Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programmes”
“So where are we on sustainability?” the finance minister said.
He said that the Organisation for Economic Co-operation and Development (OECD) has said that CBI can help to undermine common reporting standards.
“The OECD is considering a range of additional approaches to prevent the abuse of citizenship by investment schemes and this may include policy related measures and will take into account the role of all stakeholders involved, including the jurisdiction involved in the schemes’
“Mr. Speaker, Honourable Members, we have seen this movie before. When the OECD and the IMF start ganging up on you and telling you that they are going to close loopholes on you and there is a risk that things are going to end soon.
“We saw this in the financial services discussions,” he said, adding that the rug was pulled from under many countries who thought that the next panacea was “tax havens and staying off black lists and the rest of it.
“So when you tell me about sustainability, you have to tell me about the sudden stop risk, you have to tell me about the OECD cracking down on jurisdictions and you have to tell me about the European parliament which in April created a special committee on financial crimes, tax fraud and tax avoidance and said the parliament will be investigating, for the first time, tax privileges for new residents or foreign income such as citizenship programmes internationally.”
Gonsalves said that CBI is a “race to the bottom”, adding that the OECS countries are selling the same thing, “a passport”, which he said gets holders the same thing: visa-free travel in the Schengen zone and the possibility to get a visa to go to some other place.
He said that countries budget for the income under CBI but there is a race to the bottom because the value of the passport is the same but the cost varies.
In one fell swoop St. Lucia reduced their price by 50 per cent to $100,000, he said, adding that Castries did so after Antigua and Barbuda and because Dominica was charging $100,000.
Gonsalves said he would not speak about “the scandals that have proliferated around these programmes nor the criminals, suspected terrorists, the diplomatic passports sold to unsavoury characters.
“And I don’t want to stand here in judgement of any other country and their decisions, but we see what citizenship by investment had produced. And I am waiting, Mr. Speaker, I am afraid of what is going to happen now that the Supreme Court of the United States has upheld the Muslim ban, the travel ban on people from certain countries and say those people can’t come in to our country.
“I wonder what happens when they have a passport that they have bought specifically to enter those countries.”
CBI comes with risk of disconnection for correspondent bank relationships, Gonsalves said, adding that this may lead to Vincentians overseas not being able to wire money back home.
At this point, Leacock accused Gonsalves of being involved in scare mongering.
Gonsalves denied the allegation and went on to say that CBI could lead to visa restrictions.
“Like Canada?” said Leacock.
In 2012, Canada imposed visa requirements on holders of SVG passports – where the CBI programme ended when the ULP came to officer in 2001.
Canada said it had concerns about the security of the SVG passports, saying that persons who had been deported had returned to Canada with new passports under different names.
Ottawa also said it had imposed the visa restrictions because of the high number of persons filing for refugee status in Canada.
I do agree with the finance minister that we should heed any loophole approaches as it is only another sophisticated scheme to money laundering. CBI accumulated income is rightly so a race to the bottom because the value of the passport is the same but the cost varies, one that will eventually affect us all being of SVG origin.
Those of us who may be travelling with our Canadian and American passports must be cognisant that through technology, the swiping of our passport declares our life history as Big Brother never sleeps.
There are many wealthy SVG people all over the world who may not wish to reside at home but with a feasible and trustworthy shareholder resort building development initiative, may be willing to review shareholders possibilities.
However, one of the major drawbacks is that skill trainings within the area of customer service need to be more seriously considered, starting at the port of entry within the mainland.
More confusing rubbish from a very confused lady.
The stance of impartiality will forever be confusing to those blinded of the understanding for integrity.
What I cant understand is how none of these big shots talking about building some darn factories so the ordinary man could go to work- they shut down every factory that existed under the sun but never rebuilt any- SVG service industry my foot … tourism is even a bigger fallacy …all the government offices filled with public servants who have nothing to do; pure crap bout niche… can we not get real???… too many people on SVG streets hustling …
Wow! Someone who really knows what is going on! we all know that what you say is the honest truth but you have concisely and bluntly told it like it is as well as providing the solution. Ony Ivan O’Neal has mentioned creating workplaces. Many other politicians would call them sweatshops and at least one of them may even try to make them exactly that. I hope to remember to look for more of your comments. Brilliant!
How can selling of passports be legal? It is not uncommon for authorities to turn a blind eye on illegal activities until they see the opportunity to benefit in the reverse.
The G7 leaders are grabbing at straw and therefore have turn trade into exploitation internationally. Tainting any country they can indict. As a small country we have to view the BIG picture and move with caution.
Elma you become more stupid in everything you write. No one is proposing selling passports. The deal is to sell citizenship under new laws that will have to be drafted and passed in parliament. A new citizen under such a scheme will be entitled to a passport. How on earth can that be illegal?
There are a lot of people out there who are more ignorant than you and may just believe the rubbish you write.
Simon, Elma seems to be a little mixed-up but lets not be insulting. I think her heart is in the right place although all of us are indoctrinated in one way or another. Keep in mind our PM is the master of indoctrination. Elma should know that the restrictions on such a program can also be very strict and accompany due diligence as to who gets the citizenship. Any informed person knows that we already do have a CBI program, albeit a secret one. At present we do not know how many have attained citizenship and what they had to do for it. Camillo is not being honest with the people with his facts. The CBI program has benefitted some nations very much, although we all know that our government gets a failing mark when it comes to accountability and management of revenue. Many wonder what was the money used for that was already brought in from our secret CBI program. Rumor has it that ten years ago the cost was 30,000 USD, for citizenship. I wonder what it has been going for lately or if they actually did stop it for fear of being caught.
Over 35 countries in the world, including the United Kingdom, France, Germany, Spain, the United States, and Canada, have very successful formal and transparent citizenship or residence by investment programmes.
Alas, St. Vincent and the Grenadines prefers an ad hoc — i.e., informal — and secretive programme run out of the office of the Prime Minister which is how Dave Ames and many others obtained citizenship under this regime.
Rumour has it that the stateless Palestinian “investors” who visited here late last year were offered passports in exchange for who knows what (https://www.iwnsvg.com/2017/12/12/bottom-feeding-with-the-palestinians/ ).
So you disagree with a CBI programme. What then are you proposing. Am tired if these fat, lazy politicians with no ideas to move us forward. We continue to be a highly indebted, poor country with high unemployment after more than a decade of this visionless leadership. There is no end of our poverty and unemployment in sight.Get to work guys!
Dear Muse they have been hard at work since they were elected, building a dynasty.