Defensive Moves That CBI Jurisdictions Can Make to Forestall the EU Phase-Out
The global CBI industry has been on the verge of structural and global changes for a long time.
Members of the European Parliament are increasingly seeking to put pressure on the European Commission and report on the need for stricter regulation of the laws on citizenship and residency by investment. This regulation of the law consists of forcing states with visa-free access to the Schengen area to cancel CBI programs.
In addition, the reports talk about the need to impose a strict nationwide quota on the number of applicants and make access to these programs even more difficult. Members of the European Parliament propose to introduce even more bureaucratic procedures, including:
- Tightening of requirements and checks of sources of funds (AML) and reliability of the applicant (Due Diligence);
- Monitoring the actual residence of applicants;
- Changing the ways of investing to make programs less attractive to applicants.
Some countries’ economies rely heavily on CBI, the share of which accounts for up to 50% of GDP in some cases. That is why these proposed changes are of concern not only to agents and investors but also to entire states.
To prevent these measures from destroying the economies of a number of small countries, I propose the following measures to reduce the number of unwanted applicants and, at the same time, maintain CBI programs and contribute to favorable economic growth:
#1 – Tighten the requirements and methods for verifying applicants
Introduce, for all states that issue citizenship against investment, a single list of requirements for the applicant:
- Age from 25 years;
- Not a civil servant;
- Income of at least $200,000 annually for the last five years;
- Absence of previous convictions and existing administrative and enforcement proceedings;
- Absence of dangerous diseases;
- No more than three family members in addition to the applicant allowed;
- Verification of national origin, as well as applicants’ profiles directly by authorized persons from the EU.
This measure will limit unwanted individuals’ access to the program.
#2 – Introduce electronic selection
This format, in its content, can be made similar to the green card lottery. The state that implements the CBI program, twice a year, opens the acceptance of online applications for the acquisition of citizenship, but still for a fee – for investment. At the same time, these states will have to strictly adhere to the selection procedure developed by the European Union and the list of required documents.
An applicant may only apply through a licensed agent. In addition to general information about the applicant, a package of documents is attached to the application, including sources of funds, reliability, medical examination, and so on. The opportunity to apply will be open for two calendar months. Further, a certain number of applicants are randomly selected using computer technology, who, having provided the entire package of documents and having gone through all the bureaucratic procedures, can already apply for citizenship.
I propose that the verification process of selected candidates be carried out with the help of persons from the states implementing CBI programs together with persons authorized by the European Union.
This measure will not only limit unwanted individuals’ access to the program to but also reduce the number of people who will eventually receive citizenship.
#3 – Tighten measures on the part of states implementing CBI programs
I propose to introduce mandatory conditions after obtaining citizenship:
- Stay in a new country at least twice a year for at least one month for the duration of the citizenship; and
- Invest an additional 50% of the money spent on obtaining citizenship over the next five years in equal installments.
This measure will support the economy of the country whose citizenship the person has received. This will prevent those people who could illegally earn one-time money from participating. Only truly successful and talented people will be able to pay for five years.
#4 – Physical presence requirements
I propose to introduce three mandatory stages of the applicant’s physical presence in the new country:
Stage 1 – The applicant must be personally present at the time of filing an application with a licensed agent in his country, at which point he should also submit biometric data.
Stage 2 – The applicant is required to undergo an interview at the embassy of the country whose citizenship he applied for. The interviewer will ask questions not only from the list of documents provided but also regarding the goals and intentions of obtaining citizenship.
Stage 3 – The applicant must personally come to the embassy to receive a passport.
This measure will prevent fraudsters and persons impersonating other people from obtaining citizenship.
The above measures will allow EU members to look differently at CBI programs, acertaining their real value to society while properly vetting applicants.