OECD Clampdown on RCBI: Rooted in Factual Analysis or Baseless Allegations?

Julie Nguyen, Harvey Law Group
Hong Kong

In 2018, the Organisation for Economic Co-operation and Development (OECD) introduced its Model Mandatory Disclosure Rules, which imposed disclosure obligations on investment immigration intermediaries, and a practical guidance for Financial Institutions, including a List of Potentially High-Risk Residency/Citizenship by Investment (“R/CBI”) Schemes, to “clamp down on CRS avoidance through residence and citizenship by investment schemes”.

Proponents of the OECD’s RCBI-clampdown suggest that the implementation of these dual initiatives will combat abuse by criminals, including money laundering and tax evasion and, moreover, that it would make the industry more transparent and accountable by engaging increased due diligence and disclosure obligations.

Opponents of the OECD’s approach, however, consider it to be problematic largely because of the lack of empirical evidence demonstrating the damage done to the integrity of CRS in these allegedly high-risk countries.

It has been wholly unclear how the OECD has determined the grounds for inclusion or exclusion from the List in the first place. The OECD’s published List states that it is based on an “[analysis of] over 100 CBI/RBI schemes”, but has provided almost no detail as to the assessment of each country. The fact that a number of countries were removed from the List within mere days of its publication puts forward the possibility of a flawed initial determination and ambiguous bright-line rules.

This general lack of information concerning the OECD’s “analysis”, including why those countries were removed, has made it particularly difficult for industry professionals to make sense of the OECD’s initiatives and for governments to concretely remedy their situation. 

Given this new development in the investment immigration industry, professionals and clients need to arm themselves with the relevant information to navigate this evolving landscape, such as how to minimize risk and how jurisdictions can defend their programs to flourish in this new environment.

These topics and more will be the subject of debate at the Investment Immigration Summit in Ho Chi Minh City, Vietnam taking place April 9-10, 2019, where industry experts will be present to weigh in and answer your pressing questions. 

Click here to register for IIS HCMC.

HARVEY LAW GROUP 

Julie Nguyen

Registered Foreign Lawyer (Ontario)

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