St Lucia Backdates CIP Enterprise Approvals, Sparks Opposition’s Ire

St Lucia’s Citizenship by Investment Program (CIP) Board has issued a statement addressing the retroactive approval of two enterprise projects. The announcement follows a government gazette dated September 12, 2024, which approved two projects with a January 12, 2024 commencement date.

The gazette officially sanctioned two “Approved Enterprise Projects” under Section 11(7) of the Citizenship by Investment Regulations:

1. “Caribbean Galaxy Real Estate Limited – National Infrastructure Improvement Program”
2. “Bemax LLC – Rock Hall Housing Development Project”

This backdating means the government officially recognizes these projects as approved and operational since January, despite their formal gazetting in September.

Such a practice could potentially allow the retroactive application of rules or benefits, or some might interpret it as an attempt to legitimize actions or agreements that occurred before official approval.

The CIP Board’s statement aimed to elucidate the situation, emphasizing that the law requires the gazette publication to inform the public of approved projects.

According to the Board, “the legal capacity to approve such projects was provided in the Citizenship by Investment (Amendment) Regulations,” published on December 20, 2023.

Despite the projects’ approval and receipt of applications, the Board adamantly maintains that it has not granted any approvals for applications, and developers have not received any funds.

The enterprise agreement, they clarify, requires developers to “finance the projects upfront and recover their monies when approvals are given and minimum investments are paid.”

The Board disclosed that the developers are now ready to begin their projects. The Housing Project awaits final approvals, while the developer and the Department of Infrastructure have finalized the Memorandum of Understanding (MoU).

In an unexpected revelation, the Board divulged that the government never gazetted three projects presented as approved between 2016-2021.

These include the Range Development (approved as real estate but sold as donation), the DSH Project (Alpina Hotel and Alpina Square), and the Galaxy Project. The government had approved all as real estate developments but never officially promulgated them.

The Board assured the public that they “will act in accordance with all the legal and statutory requirements and close any gaps that previously existed.”

This disclosure emerges against a backdrop of broader concerns surrounding Caribbean CIP practices. In May 2024, MSR Media, helmed by movie producer Philippe Martinez, filed a RICO suit in US federal court against several Caribbean CBI stakeholders, including Caribbean Galaxy, a prominent developer in St Lucia’s CIP, McClaude Emmanuel, current CEO of the St Lucia CIU, and Ernest Hilaire, St Lucia’s Deputy Prime Minister.

MSR Media claims to possess evidence of misconduct related to CBI programs in St Lucia, including allegations of kickbacks, fraud, and money laundering. The lawsuit’s scope has since expanded, potentially ensnaring third parties allegedly complicit in these illicit practices.

St Lucia’s government and Caribbean Galaxy have distanced themselves from Martinez’s allegations. The government maintained that it would “not be bullied by anyone or company” and vowed to defend its position against what it described as “false and malicious attacks.”

“A worrying sham”

Opposition leader Allen Chastanet has decried the backdated approvals as a “worrying sham.” He expressed concerns regarding governmental transparency and accountability, asserting that the administration “cannot seem to follow the law.”

He cast doubt on the infrastructure program’s legitimacy, citing a lack of requisite legislation. He claimed that “we have evidence to show that the local agents have been processing applications for the infrastructure program specifically.”

The former Prime Minister also scrutinized the volume of files allocated to Galaxy.

According to Chastanet, statements have indicated Galaxy received “6000 files allocated for the real estate program” and an additional “7000 thousand files for the infrastructure program,” both of which have reportedly sold out.

Challenging the CIP Board’s stance on historical projects, Chastanet claimed that the Range project was actually “a donation program because the Government of Saint Lucia was going to lend the money through the donation program. It was never a real estate program.”

He advocated for enhanced transparency, particularly regarding the infrastructure program’s finances, questioning “why is it that they were able to collect $700 million and only to do $100 million of work?”