L’ecuyer: The Industry Is at an Inflexion Point and Inaction Will Cost Us
Addressing industry stakeholders yesterday, Bruno L’ecuyer stressed the need for coordinated action vis-a-vis European institutions, highlighted the IMC’s new education program, and urged politicians to avoid uninformed decision-making.
The below are excerpts from an address by the IMC’s CEO, Bruno L’ecuyer, on the occasion of the 4th Investment Migration Forum, 5th June 2019, Geneva.
We must all remain conscious of the long-term future of our industry and seize the opportunity to play our part in protecting it. This is truer than ever before in the increasingly challenging global political and business climate in which we operate today.
I’d like to reflect on some of the discussions we have held here and to sound a note of caution. Policy change is coming. It will happen, by legislation or force of public pressure, whether we accept it willingly or not. Change will take place with our guidance and input, or it will go ahead without it. We see an opportunity.
The European Commission has set up two Expert Groups to inform its next steps in the wake of January’s report. Based on the Group’s findings, the next European Commission may propose recommendations or legislation on Investment Migration.
Read also: IMC-Chief on Brussels Meeting: “Commission Deserves Credit for Inclusive Approach”
Most recently, 751 MPs were elected to the European Parliament, where they will represent their voters in Brussels. Together with the new Commission and Member State governments, they will help to set the course of EU policy, including on our sector, for the next five years.
Within the OECD, work is ongoing to assess whether investment migration can be used to mask tax evasion, and now the Council of Europe has also begun its own report on the topic.
Each institution has a different focus, but the overall message for us is simple: Investment Migration is in the spotlight – we are under the microscope.
At this stage, we cannot say how the environment will change. All that we can be sure of is that change will happen, and we must be ready for change under any condition.
This scrutiny is in fact an opportunity for us to demonstrate the value of what we do to the economy and wider society and prove that we will ensure our business is always conducted to the highest standards.
Some policy and lawmakers continue to have grave misconceptions. And quite frankly I am alarmed by what I hear. Indeed, the European Parliament think our industry should cease to exist altogether.
See: Euro-Parliament Votes to Endorse “Phasing Out” of RCBI in Europe: “Not the Right Answer,” Says IMC
Proving our value and high standards, while addressing some of the legitimate concerns that have been voiced about our industry, will be critical to ensuring the long-term viability of our sector.
This challenge is formidable but surmountable and I ask you all for your support in overcoming it.
What the IMC is doing
The IMC, as the sector’s only global, public-facing industry association, has been building its capacity to advocate for industry interests, by engaging with the legislators and policymakers who are relevant for the future.
We have had early successes, notably in Brussels where we have succeeded in bringing the industry’s position into the European Commission’s Expert Group. We’ve met the Commission, we’ve met MEPs, and we’ve met third parties who in turn influence EU institutions. The efforts have been focused on building credibility.
The IMC’s Special Task Force is now in part up and running. Our first challenge is to tackle the significant information gaps in public discourse on Investment Migration which we have been doing through the targeted distribution of our working papers that are overseen by our chairman and his spectacular editorial board.
Our next task is to research and publish two reports on due diligence. These are aimed at supporting good policymaking at the EU level, providing much-needed primary research on best practice recommendations. We expect this research to contribute to setting global standards on due diligence.
A more pro-active role for the IMC in shaping policy
The IMC is now known to those in Brussels who draft policy for our field. We are now seen as the body representing the industry and our views are beginning to be taken onboard. In the very least we have been clear that we will not be passive but rather seek to engage positively with our critics.
We have been, for the last year, engaging with other global organisations.
At a special sitting last week our application to join the United Nations Economic and Social Council (ECOSOC) was unanimously approved and we now have consultative status as a non-profit.
The ECOSOC is a platform for debate, reflection and thinking on sustainable development and is one of the six organs of the United Nations – it is as important as the UN General Assembly, Security Council, and International Court of Justice. This is yet another milestone in the global recognition of Investment Migration as a responsible industry and a significant step forward for us all.
Investment Migration Certification Ready for First Students
In another first, the long-awaited Certification in Investment Migration is now ready to welcome its first cohort of students. This is the world’s first educational certificate in Investment Migration and a ground-breaking moment for our industry.
It contributes to professionalizing our industry by providing verifiable evidence of competency in Investment Migration. This is the first step in our mission to provide a comprehensive suite of accredited Education and Training programmes. I urge you all to capture the value of this today.
In line with this, we have re-structured the membership framework of the association to further professionalise ourselves and add credibility to the sector, there are now 5 classes of membership:
These changes are essential in re-balancing the debate around Investment Migration and reinforcing the value of the IMC’s work with policymakers.
However more effort, resources and commitment will be needed from us all to achieve the level of cooperation and acceptance that will be needed to protect our sector’s licence to operate in the long run.
The best response to the examination of our industry by the authorities is not to remain on the defensive, on the back foot, and constantly reacting to criticism from others.
Just last week two outgoing MEP’s wrote to the commission and council presidents demanding the Visa Waiver program for St Kitts be rescinded citing the threat from money laundering and security.
The point is that with a coordinated joint effort we can almost be certain to limit such occurrences.
We must be proactive – firstly by showing that we are getting ahead of the game, putting our house in order, and taking concrete steps to stamp out the bad practice that borders on criminality, and secondly by demonstrating the value of our industry.
This approach is the best remedy to the brewing misunderstanding and disconnect we find between ourselves and the global policy and lawmakers sitting in Brussels and Paris today, and perhaps in other capitals tomorrow.
The fact is that we as an industry do not want to be unfairly associated with illegal or nefarious activities. We are sensitive to public opinion.
Experience has already shown that a few bad cases can have a tremendous cost to our collective reputation. The sooner we can dissociate Investment Migration from illegality, the better for all of us.
We have to recognise the legitimate concerns of the public institutions even if, unfortunately, a few bad cases receive a disproportionate amount of attention.
We must welcome greater scrutiny and confirm our commitment to the highest possible levels of harmonised governance.
We need to welcome and help to create an industry with governance and due diligence infrastructure that matches the high standards of regulated wealth management markets.
Unlike the majority of investment products that generally only produce value for the investor, Investment Migration creates societal value through the creation of a debt-free liquidity stream for sovereign states and as a beacon for FDI that can help modernise and diversify economies, creating opportunities for the domestic population.
While we all know the value of Investment Migration and the benefits it brings to countries and communities because we live it daily, this is not well-understood further afield. No one else will make the positive case for our sector unless we do it collectively.
This is why, if the necessary funding is made available by the industry, the Task Force will be commissioning research outlining the societal and economic benefits of Investment Migration. We will soon start with Antigua & Barbuda, who support the work.
Call to EU Institutions
To the EU Institutions, as Chief Executive of the IMC, I credit them for the openness which they have demonstrated thus far, and I hope they will continue cooperating with us.
We believe that Investment Migration is an area where the EU is well-positioned to set global standards; putting in place rules, principles, and best practice frameworks that will then be taken up elsewhere in the world. These will ensure that the sector delivers the maximum value to society and the economy.
It would be a shame if, through the lack of a coherent approach to policy by the EU, the field were to be left open to those with practices that are harder to defend, and who are less sensitive to public pressure.
If policymakers build their rules based on views that are untrue or incomplete, it may result in policy that is impractical, ineffective or unenforceable.
If the European Commission eventually issues recommendations or best practices, we must ensure that they actually encourage good behaviour, and we need to help frame their thinking and drafting such measures.
Call to Member States/non-EU Governments
My message to involved governments is that it is important that we act coherently and cooperatively with the EU institutions.
It is in everyone’s interest to ensure that we achieve a rigorous, fair and formalised system for Investment Migration.
Nationality is the legal competence of each Member State. However, the EU has a long history of the frontier between national and EU competence being somewhat fluid, particularly in areas of considerable public concern.
If a topic is of genuine public concern, as Investment Migration is, governments will come under pressure from other Member States as well as their own voters, to address it. There will be a cost to inaction.
Moreover, it is possible to set common due diligence standards for Investment Migration without affecting the conditions for attributing nationality.
For countries outside of the EU which rely on access to Schengen, but do not have a seat at the table in Brussels, the potential for a negative outcome is acute.
That’s why we need to get ahead of this situation by agreeing on a common position to encourage sensible regulation from the EU, respecting the EU Treaties while also addressing public concerns.
The focal point for all of this work is the Task Force; I urge any interested parties who we have not already contacted to speak to us.
A watershed moment
We remain at an inflexion point in the history of our industry.
Policy developments within EU institutions and the OECD could result in a less than positive outcome for us. But if well-managed, it could secure our future for years to come by cementing our industry’s role within a globalised world through effective standards and regulation.
Now, with the new Parliament and Commission, is the time to prove to Brussels and European voters that we are part of the solution.
With all of this in mind, we bid a fond farewell to Geneva and a warm hello to Belgium, and more precisely the capital of Europe – Brussels.
In collaboration with the Congress team at Visit Brussels, we look forward to welcoming you to a bigger and refreshed Investment Migration Forum the first week of June 2020.
We are ladies and gentlemen at the tip of the proverbial iceberg, let’s all seize the opportunity of change to act now collectively.
Bruno L’ecuyer, CEO of the Investment Migration Council,
5th of June, 2019,
Bruno Lecuyer is Chief Executive and Interim Chairman of the Investment Migration Council. Bruno leads the Secretariat reporting to the Governing Board and is responsible for all IMC operations. A regular contributor to international publications and conferences in Europe, the Middle East and Asia, he has held positions in London, Paris and Hong Kong. Bruno was previously head at a national financial services association, acting as a bridge between government and industry. He has extensive expertise and experience in the management and expansion of a professional services association. A member of the Governing Board, Bruno acts as its Secretary.