Only hours after the European Commission yesterday issued a formal Recommendation to suspend the issuance of residence by investment permits to Russians and Belarusians, Latvia’s governing coalition announced it has decided to altogether scrap its golden visa program, in which Russian investors have historically accounted for an absolute majority of participants.
According to the LETA, the Latvian Information Agency, Prime Minister Krisjanis Karins - whose coalition holds 46 out of 100 seats in the Saeima directly and has the implicit support of another 9 seats, giving it the majority needed to push through legislative changes - said the government had decided yesterday to end the program and that the Ministry of Interior is already drafting the necessary amendments to the law.
In a statement that appeared at odds with those of the Prime Minister (most likely as a result of reporters' imprecise rendition of the actual phrasing), Coalition MP Juris Pūce reportedly told Latvia's public broadcaster that the ban would apply to Russians and Belarusians, raising questions as to whether the program would, in fact, be discontinued or whether it would merely ban applicants from Russia and Belarus.
The same Pūce indicated that the precise wording of the amendment would be prepared in the coming days and placed before the corresponding committee in the Saeima, which would likely adopt the measure already by Wednesday before tabling it in the assembly's next plenary session.
Not so much an execution as a coup de grâce
The formal termination of Latvia's golden visa will not represent any significant sacrifice for the country's economy; as IMI has previously reported (The Protracted Demise of Latvia’s Golden Visa), the program has been moribund since 2015, a year during which approval volume fell by nearly one order of magnitude.
Hopes of a revival were temporarily ignited in 2018 and 2019, when Vietnamese applicants began to take a liking to the program's relatively less capital-intensive business investment option, driving a rebound in approvals (Latvia’s Golden Visa Back From Doldrums, Courtesy of Vietnamese Investors).
In the last two years, however, approval volumes have dwindled to negligible levels. Only 30 investors received residence permits in 2020 and only 14 did so in the first half of last year.
EU capitalizing on the war in Ukraine to attempt to kill off an industry
The investment migration industry increasingly suffers collateral damage from Putin's decision to attack Ukraine. In the last five weeks, EU politicians have seized upon the prevailing zeitgeist to - somehow - bundle its years-long campaign against investment migration programs into the ongoing countermeasures against Russia. Those efforts have met with remarkable success and the EU has, to a great extent, been able to paint the operation of such programs as practically tantamount to assisting Vladimir Putin.
Yesterday's announcement in Riga rounds out what is surely the most damaging month in the investment migration market's history:
- As Russia amassed troops along the Ukrainian border in early February, the UK scrapped its Investor Visa, ostensibly to prevent the influx of "dirty Russian money" into London.
- A few days following the invasion, the White House, the EU, the UK, and Canada vowed to "limit the sale of citizenship - so-called golden passports [an unflattering moniker for CIPs deliberately popularized by the EU this year] - that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems."
- On February 27th, Portugal became the first EU golden visa country to suspend the receipt of applications from Russian and Belarusian nationals.
- One day later, Greece followed suit.
- On March 2nd, Malta, which had initially resisted the idea of discriminating against Russians and Belarusians qua Russians and Belarusians, bowed to EU pressure and suspended those nationalities from both its citizenship and residency programs, citing an inability to conduct adequate local due diligence as the pretext.
- On March 4th, the European Council suspended visa-free travel to Schengen for ni-Vanuatu citizens whose passports were issued after 2015, effectively clipping the wings of one of the world's most popular CIPs.
- On March 5th, the CIPs of Dominica and Antigua & Barbuda became the first extra-European citizenship programs to bar Russians and Belarusians from applying to its programs. Antigua & Barbuda, moreover, also suspended the receipt of applications from Ukrainians, also citing an inability to carry out local vetting.
- On March 7th, two US congressmen submitted a bipartisan bill - the No Travel for Traffickers Act - which sought to, among other aims, exclude countries that operate CIPs from participation in the US visa-waiver program and to have the US government work with the EU and UK to "eliminate Schengen area visa-free travel for countries that sell passports".
- On March 9th, the European Parliament voted to adopt a report that sought to pressure the European Commission into proposing anti-RCBI legislation, going so far as to call for the EU to ban sovereign countries in the Caribbean from operating CIPs.
- On the same day, Saint Kitts & Nevis' CIP became the third in the Caribbean to ban Russian and Belarusian applicants.
- A day later, Grenada's CIP adopted the same measures.
- On March 14th, disconcerted by EU and US moves against citizenship by investment, Antiguan Prime Minister Gaston Browne wrote to European and American lawmakers urging them to consider, with cooler heads, the negative economic consequences their proposals would have for his region. The Antiguan government also prosed the establishment of a pan-Caribbean CIP regulator as a means of assuaging EU and US concerns about their programs.
- On March 18th, Saint Lucia, the Caribbean's last hold-out, became the final Caribbean country to stop accepting applications from Russians and Belarusians.
- On March 23rd, the golden visas of Ireland and Spain also banned Russians from applying.
- On March 25th, Bulgarian lawmakers voted conclusively to end that country's semi-direct citizenship by investment program, leaving the EU with but a single surviving CIP (Malta's MEIN is holding on tenaciously despite tremendous pressure).
- Just yesterday, the European Commission issued a formal Recommendation in which it called for the immediate termination of CBI programs, the revocation of the citizenships and residencies of sanctioned Russians and Belarusians, and an immediate freeze on the issuance of golden visas to ordinary (non-sanctioned) Russians and Belarusians.
Events of the last month have prompted strong reactions and serious concerns from industry stakeholders:
Migronis, a Ukrainian RCBI firm that, until last month, sourced the majority of its clients from Russia, has sworn off its largest market altogether for ideological reasons. IMI commentator Stephane Tajick has raised the question of whether we are witnessing the extinction of citizenship by investment. Martin St-Hilaire argues that Brussels' cutting Vanuatu off from Schengen access was but the opening salvo in a wider "crusade against global mobility", while Nuri Katz opines that it's not too late to save CBI but that doing so will require a Herculean effort. Antigua & Barbuda's Foreign Minister, meanwhile, has promised to fight efforts to kill Caribbean CIPs "to the bitter end."
Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine - online or offline - for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.