The Statelessness Dilemma: Legal Responsibility in the Citizenship by Investment Industry

 

From Cyprus to Grenada, Saint Lucia to Vanuatu, a handful of prominent incidents involving the revocation or attempted revocation of CBI-acquired citizenships have recently hit the news. Apart from inviting a swathe of adverse media, such instances also raise important questions about state responsibility. Namely, how should governments respond to limit reputational damage and political fallout where national integrity is threatened by the unscrupulous behaviour of those who have acquired citizenship by way of a Citizenship by Investment Programme (CIP)?

On which grounds do governments revoke citizenship?
The acquisition and bestowal of CBI-acquired citizenship is a mutually beneficial endeavour; a privilege for the country in receipt of the individual’s contribution or investment and an honour for the applicant receiving citizenship – with all of its associated rights and opportunities – in exchange.

But where the actions of the individual undermine the reputation and standing of the country in which citizenship has been acquired, most would argue that the government in question should retain the right to take away that honour and revoke the citizenship that has been bestowed.

Indeed, there is precedent for the revocation of CBI-acquired citizenship in certain cases, with most jurisdictions making provision for such in their nationality and citizenship laws.

Notable examples include:

• where a serious offence is committed by the applicant following the acquisition of citizenship;
• where an individual’s behaviour is contrary or prejudicial to the vital interests of the state; or
• where – despite the robust and comprehensive due diligence exercised at the time of application – it is later uncovered that citizenship was fraudulently or duplicitously obtained.

Notwithstanding the relevant clarity here, a crucial yet controversial element of the revocation of CBI-acquired citizenship remains, as yet, largely undetermined: what are the legal implications of revoking citizenship when such action would render that person stateless?

See also: Citizenship by Investment as Insurance Against Statelessness

When revocation is problematic
Two scenarios are worth considering in detail:

The first is the acquisition of citizenship by an individual or family that is stateless at the time of application. Examples abound, as Saint Lucia, Saint Kitts & Nevis, Grenada, Antigua & Barbuda, Vanuatu, Dominica, Bulgaria, and Turkey all currently accept applications from stateless individuals (i.e. those who, at the time of application, are not considered a national by any state under the operation of its law).

The second scenario involves the renunciation of one’s original citizenship upon acquisition of the new. Multiple countries don’t allow their citizens to possess dual or multiple citizenships, including (to name a few) China, India, Malaysia, Singapore, Ukraine, Kazakhstan, Japan, Indonesia, Bhutan, Cameroon, and Uzbekistan; several of which are indisputably key markets for economic citizenship.

If a national of one of the above countries wishes to acquire citizenship of a second country they should, in accordance with the nationality laws of their own country, renounce their original citizenship. Whilst the vast majority become ‘covert’ holders of second passports, there are those who do indeed, as per the law, renounce their original citizenship, thus becoming “mono-nationals” of the country in which they have naturalised by way of a CIP.

“Citizenship is man’s basic right, for it is nothing more than the right to have rights” – US Supreme Court Chief Justice Earl Warren

It is in both of these scenarios where the revocation of CBI-acquired citizenship becomes decidedly problematic. In 1961, seventy-five countries signed the UN Convention on the Reduction of Statelessness, a concerted effort to reduce or eradicate instances of statelessness, with one of the most fundamental and enduring provisions stipulating that “A Contracting State shall not deprive a person of its nationality if such deprivation would render him Stateless”.

The 1961 Convention followed the 1954 Convention relating to the Status of Stateless Persons and these, together with the 1948 Universal Declaration of Human Rights, comprise the basis upon which the mitigation of instances of statelessness has become a key precept of international law.

Most nations – regardless of whether or not they have acceded to them – have adopted at least some of the central tenets of the Conventions as part of their citizenship and nationality laws.

Laws protecting against the arbitrary revocation of citizenship and the avoidance of revocation where it results in statelessness exist for very good, historical reasons. The denaturalisation laws passed by the Vichy regime and Nazi party during the second world war, for example, saw thousands of naturalised men and women rendered stateless and deprived of their fundamental human rights through the revocation of their citizenship.

Thus, serious and measured consideration should be given to the legal implications of revoking CBI-acquired citizenship (especially when such action might potentially result in statelessness). It is only very recently that empirical examples within the CBI industry have started to emerge and to give a sense of how these problems will be addressed and the precedents that will be set.

The Cypriot impasse
In 2019, the government of Cyprus announced its intention to revoke the citizenship of 26 individuals naturalised under the country’s CIP, including infamous Malaysian businessman Jho Low, as well as nationals of five other countries: Cambodia, Russia, China, Iran and Kenya. Despite numerous examples of citizenship deprivation in Cypriot case law (536/2008, 1034/2012, 1182/2005, 1489/2008), the 2019 revocation attempt is the first example of citizenship being revoked following naturalisation under the Republic’s CIP.

At the publishing of this article, however, all 26 individuals still retain their Cypriot citizenship due to a gap in the Civil Registry Law (L141(I)/2002) where provisions pertaining to the deprivation of citizenship do not cover individuals naturalised under the CIP. This technicality underscores both the infancy of Cyprus’ citizenship by investment programme and the absence of precedent in cases of post-CBI revocation.

Another area of Cypriot case law defined by the absence of precedent is the deprivation of citizenship involving considerations of statelessness and – as with the Jho Low case – only time will tell how such considerations might influence the legality of citizenship revocation should the Cypriot courts prescribe such action.

As an EU member nation, precedent at an EU level would certainly be an influencing factor and it is in Malta (one of only four EU countries, including Cyprus, that is not party to the UN’s two fundamental conventions on statelessness) where we see statelessness as a consideration in the revocation of citizenship.

In the case of Ramadan vs. Malta (2016), the applicant, originally an Egyptian citizen, acquired Maltese citizenship by way of marriage to a Maltese national – citizenship that was later revoked by the Minister of Justice and Internal Affairs after the marriage was deemed fraudulent and annulled. The applicant asserted that the decision to deprive him of his Maltese citizenship had rendered him stateless as he had renounced his Egyptian citizenship in order to become a citizen of Malta.

Eventually, the decision to revoke his Maltese citizenship was upheld as he did not sufficiently convince the court that he had, in fact, relinquished his Egyptian nationality, nor that, even if he had, he would be unable to reacquire it. The case raises important questions about how considerations of statelessness factor into judgements on the deprivation of citizenship and how – if an applicant could demonstrably prove the renunciation of and inability to reacquire their original citizenship – this might lead to the government’s inability to revoke the citizenship of those acting in a way prejudicial to the state’s interests.

Such deliberation raises an even more important question: Is an individual’s possession of the right to acquire or reacquire citizenship of another country a sufficient determinant in justifying cases of citizenship revocation, regardless of whether or not that right can actually be successfully realised?

British justice – the finest in the world?
A recent, precedent-setting example is the highly politicised case of Shamima Begum, a British citizen who joined Islamic State (ISIS) in 2015, and whose citizenship was revoked by the British government; a move that was widely criticised in the legal community for undermining the concept of equal citizenship and conflating citizenship rights with heritage.

In Begum vs. The Secretary of State (2020), the Home Secretary’s justification centred on the claim that revocation would be permissible in accordance with international law as such action would not render the appellant stateless due to her right to Bangladeshi citizenship (despite this right being directly and vehemently refuted by the Bangladeshi government).

How the outcome of such cases will influence judgements when the revocation of CBI-acquired citizenship involves considerations of statelessness remains to be seen. We can consider, as an example, the Chinese nationals whose Cypriot citizenship is pending revocation under the 2019 order, and how the legality of the government’s decision might be affected if these individuals had already renounced their Chinese citizenship. In such a scenario, would the act of revocation effectively render the individuals stateless and, as such, be deemed a breach of international law?

It’s likely that any defence of the revocation would focus on the individual’s right to reacquire Chinese nationality, although whether or not this right could actually be realised would be far from assured.

According to Article 13 of the Nationality Law of the People’s Republic of China (1980), foreign nationals who once held Chinese nationality may apply for the restoration of their Chinese nationality if they have legitimate reasons. Of course, ‘legitimate reasons’ can be arbitrarily applied, and the process of restoring Chinese nationality would involve, at the very least, an interview, background check, and other screening measures, all serving to ensure that the successful restoration of citizenship would certainly not be a foregone conclusion. Similar hurdles to the restoration of citizenship exist in most countries that prohibit dual nationality.

Hypothesising about such scenarios reveals that any outcome from such a case is unlikely to be positive. If an applicant can demonstrate that they had renounced their original citizenship upon acquisition of the new one and that reacquiring or restoring their original nationality cannot be successfully achieved, this could seriously undermine the government’s ability to revoke the citizenship of individuals who are a threat to national security, who have committed serious criminal offences, or who are discovered to have acquired citizenship through fraudulent means.

In the citizenship by investment industry, where the integrity of a country’s CIP and the rectitude of its applicants are integral to ensuring the programme’s continued existence, such concerns are not to be taken lightly. On the other hand, if the revocation of citizenship continues in the face of irrefutable evidence that such action would result in statelessness, then the government is at risk of undermining fundamental human rights and laying waste to customary international law.

The no-returns policy
For countries operating citizenship by investment programmes that allow stateless persons to apply (there are now at least eight), these concerns are even more pertinent as the revocation of CBI-acquired citizenship would, by its very nature, render the individual stateless. Revoking citizenship, in such an instance, would be a clear contravention of the UN Convention on the Reduction of Statelessness.

In instances where states have neither signed nor ratified the 1961 Convention (or any other multilateral treaty, for that matter), key provisions of such treaties can still be incorporated into municipal law. Article 9 of the Antigua & Barbuda Citizenship Act (1982) (Deprivation of Citizenship), for example, specifically stipulates that: “The Minister shall not deprive any person of citizenship under this section … if it appears to him that that person would thereupon become stateless”.

A similar example of mitigation of statelessness provisions being incorporated into domestic law can also be found in the Commonwealth of Dominica, and this practice is common among countries that, in 1961, were dependent territories of the United Kingdom (which is a party to the UN Convention) and have since gained independence.

Mitigating statelessness
In 2013, more than 50 years after the Statelessness Convention was signed, the UNHCR convened a meeting of experts to discuss ‘Interpreting the 1961 Statelessness Convention and Avoiding Statelessness resulting from Loss or Deprivation of Nationality’.

The summary conclusions of the meeting served to elucidate some of the core precepts of the Convention, with clauses 6 and 7 offering particular clarity: “States are required to examine whether the person possesses another nationality at the time of the loss or deprivation, not whether they could acquire a nationality at some future date”, and “A Contracting State must accept that a person is not a national of a particular State if the authorities of that State refuse to recognise that person as a national”.

Not only is this second clause particularly germane to the Shamima Begum case, but, in the context of the citizenship by investment industry, both clauses would most certainly have a significant bearing on the legality of a government’s decision to revoke a CBI-acquired citizenship where doing so would render the individual stateless.

Another salient conclusion of the meeting was the assertion by several participants that, as a result of state practice and the adoption by consensus of many international resolutions on nationality, the mitigation of statelessness has become a norm of customary international law. As states are typically bound by customary international law regardless of whether or not they have codified these laws domestically or through treaties, to suggest that the principle ‘statelessness should be prevented’ is a norm of customary international law is to suggest that Cyprus, Malta, Saint Lucia, Grenada, and other countries that have not ratified the various conventions on statelessness, may well be bound by their terms regardless.

No revocation without (legal) representation!
The relatively recent establishment of citizenship by investment programmes naturally means a scarcity of consistent case law relating to the revocation of CBI-acquired citizenships. Any precedent that does exist, unfortunately, inspires little confidence in the legal analysis and due process deployed in such cases.

In 2019, the Republic of Vanuatu, for example, nullified the citizenships of four Chinese nationals who had acquired ni-Vanuatu citizenship by way of the country’s CIP. At the time of the revocation, IMI issued a critical denunciation of the revocation process, suggesting that fundamental rights such as the right to be informed of criminal charges, the right to a fair trial, and the right to an appeal, etc., had all been overlooked. Protections against the arbitrary deprivation of nationality and the right to be presumed innocent until proven guilty according to the law in a public trial are central tenets of the Universal Declaration of Human Rights. Non-adherence to such principals sets a dangerous precedent. Citizenship revocation without due process serves only to undermine the reputation of a country’s CIP, not to bolster it.

Notably, an article in the Vanuatu Daily Post published at the time of the revocation touched upon how considerations of statelessness would factor into the revocation process. Director of Vanuatu Immigration Services, Jeffery Markson, asserted that “if the Chinese concerned had had their Chinese citizenships canceled, it (would mean) that we cannot cancel their Vanuatu citizenship”. Although not stipulated in ni-Vanuatu municipal law, the apparent confirmation that the government would avoid revocation where it would result in statelessness is reassuring. Whether or not such action would be applied in practice is, as yet, unknown.

When the final decision on revocation resides with a single individual
In 2018, it was widely reported that, through the issuing of a Citizenship Revocation Order (2018), the government of Saint Lucia had revoked the citizenships of six individuals, four of whom were members of the same family (Hamid Sakhidad Barahooei, his spouse, and two children). One of the most notable features in the Barahooei Revocation Order is the justification for the revocation of citizenship: “the grants of citizenship for the following persons are revoked as, in the opinion of the Minister, these persons have committed acts which may bring Saint Lucia into disrepute”.

Despite Article 38 of the Saint Lucian Citizenship by Investment Act (2015) mandating that: “the Minister shall in writing specify the grounds for the revocation of citizenship by investment”, the 2018 revocation order is remarkably ambiguous. It is this aspect of the revocation order that is particularly troubling for Peter Foster, QC, former Speaker of the House of Assembly in Saint Lucia, who ardently opposes the revocation of citizenship in almost all cases, regardless of whether resulting statelessness is a consideration: “Except in cases where citizenship has been fraudulently obtained, once you are a citizen of Saint Lucia, you are a citizen of Saint Lucia. It doesn’t matter if it’s conferred by way of investment, donation, marriage, birth, or any other means; citizenship is a right and it sets a dangerous precedent if the government has the power to revoke that right at will”.

The primary issue relates to the arbitrary nature with which revocation orders can be applied. According to Article 38 of the Citizenship by Investment Act, CBI-acquired citizenship may be revoked if:

1. it was obtained by false representation or fraud;
2. the person has been convicted of “an offence”; or
3. the person has performed an act which, “within the opinion of the Minister, has the potential to bring disrepute to Saint Lucia”.

The evident lack of clarity in the Citizenship Act leads to the unfortunate situation where any interpretation of the deprivation of citizenship clause can only be purely subjective. ‘An offence’, for example, is not qualified in any way, which suggests that which specific offence or category of offences might merit the revocation of citizenship is dependent entirely on the subjective interpretation of the Minister.

Similarly, “has the potential to bring disrepute” is equally ambiguous, and it is clear from the provision itself that the interpretation and application of this power lie at the sole discretion of the Minister. Such ambiguity creates a situation where, at best, there is potential for the inconsistent and opaque application of revocation orders. At worst (according to Peter Foster), “the revocation of citizenship becomes a powerful tool – the arbitrary, subjective, and arcane utilisation of which, if not properly overseen, can potentially result in inconsistencies, discrimination, or even political victimisation”.

The sins of the father
One of the most controversial elements of the Barahooei case is the age of the applicant’s two children who, at the time of revocation, were both under the age of 16. The case has sparked debate around one of the foremost considerations associated with the revocation of CBI-acquired citizenship: in cases of family applications, is it permissible for dependent applicants to have their citizenship revoked as a result of the primary applicant’s actions?

Although there is significant deliberation over whether a parent can be considered responsible for the actions of their child, it is commonly accepted, both in law and in custom, that a child cannot and should not be held accountable for the crimes of their parents.

In the case of the Barahooei family, there is no evidence to suggest that they had renounced their original citizenship and it is therefore assumed that, following the revocation of their Saint Lucian citizenship, they simply reverted to being mono-nationals of their original state. However, where revocation of citizenship can potentially result in statelessness, these issues become decidedly more consequential. All UN Conventions on Statelessness, as well as the Human Rights Charter and the Convention on the Rights of the Child, express a clear presumption against statelessness, especially with respect to children, and ensuring that the fundamental rights of children are protected should be a key consideration of all governments.

Considering that Saint Lucia has neither acceded to the UN Convention on the Reduction of Statelessness nor adopted any of its central tenets as municipal law, the shortcomings in the Act’s deprivation of citizenship provisions are important. This, combined with the recent execution of revocation orders and Saint Lucia’s acceptance of citizenship applications from stateless persons, suggests that the scrutinising and refining of these critical elements are urgently required.

Due diligence, due process
Following the string of CBI-acquired citizenship revocations over the last few years, one of the principal preoccupations of Citizenship by Investment Units (CIUs) has been comprehensively enhancing due diligence processes and ensuring that the most robust checks are employed to guarantee the veracity of the application and the integrity of the applicant. Of course, no amount of due diligence can pre-empt an offence that will later be committed and just because a person has not previously engaged in criminal acts does not preclude their ability to behave unlawfully in the future.

Similarly, even the most robust due diligence cannot uncover the criminal actions of an applicant before they have become the subject of an investigation and CIUs cannot reasonably be expected to reject applicants whose alleged crimes are not yet known. The government of Antigua & Barbuda, however, is only too aware of how damaging adverse media around such issues can be for a CIP, with the case of Mehul Choksi (who was accused of defrauding the Punjab National Bank two-months after obtaining Antiguan citizenship) following Antiguan Prime Minister, Gaston Browne, all the way to the UN General Assembly. An applicant’s right to appeal to the High Court of Antigua in situations of citizenship revocation is expressly stipulated in the Antiguan Citizenship by Investment Act of 2013, and it is this right of appeal that is currently being exercised by Choksi before the revocation of his citizenship can be effected.

The Mehul Choksi case does not involve considerations of statelessness and, as such, PM Browne is adamant that the revocation of his citizenship and extradition to India are inevitable outcomes that will follow the conclusion of the appeal process. How a similar appeal might be affected if considerations of statelessness were a factor, however, is a dilemma that is bound to arise sooner or later under the current system.

For all countries, a general presumption against statelessness in international law means that deprivation of citizenship resulting in statelessness would be subject to considerable deliberation in the courts. In countries like Antigua & Barbuda and Dominica where municipal law explicitly precludes citizenship deprivation in instances of statelessness, it is difficult to see how an appeal against revocation could be anything other than successfully sustained.

Striking a balance
The decision by several CIP-operating countries to accept CBI applications from stateless persons is a service to the international order and one that all those in the industry should celebrate, support, and encourage. If one of the fundamental motivations of engaging in citizenship by investment is to improve global mobility, gain access to better education, healthcare, and business opportunities, surely those that are starting with no citizenship at all stand to gain the most from such an undertaking.

However, with great power comes great responsibility. As the citizenship by investment industry matures and new precedents are set, so all governments must give careful consideration to how the issues of statelessness and citizenship revocation interact. Basic precepts of customary international law and international human rights law must be observed, while still ensuring that the integrity, and ultimately the longevity, of all citizenship by investment programmes is adequately safeguarded.

Authored by Daniel Twomey

Additional research contributed by Peter Foster QC and Eleni Drakou