Published 4 December 2017
Buckie Got It, St. Kitts and Nevis News Source
Fears next CIP reduction price sets the stage for a pan-Caribbean revenue collapse
Basseterre, St. Kitts, December 4, 201 7 – The price war in the Caribbean Citizenship by Investment Programmes, started by St. Kitts and Nevis; Prime Minister Dr. the Hon. Timothy Harris is creating headaches in the region.
“All I Want for Christmas is a CIP Accord in the Caribbean,” said Christian Henrik Nesheim, Founder and editor of Migration Insider. a leading source of intelligence for the Citizenship and Residence by Investment Industry.
In an article captioned: All I Want for Christmas is a CIP Accord in the Caribbean: 5 Reasons to End the Price War,” Nesheim pointed out that continued wavering would lead to the next price reduction thus setting the stage for a pan-Caribbean revenue collapse.
He said that the introduction of a Hurricane Relief Fund as a pretext for cutting prices did not result in the windfall of CBI revenue that was hoped for. It did however, give rise to an ongoing domino-effect of contribution requirement reductions. “Let’s hope they learned that setting off a price war is not how you solve a problem like Maria,” wrote Nesheim.
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He pointed out that most of the Caribbean CIPs cut their contribution requirements in half during 2017, but it has not resulted in a doubling of demand. “Not even close,” he said, adding: “Another unintended consequence is that prospective investors may now be biding their time, waiting to see if prices will drop even further before proceeding with a citizenship application.”
Noting that Visa-free access to Schengen is the thin line that separates the Caribbean economies from healthy GDP growth and economic ruin, Mr. Nesheim pointed out that “an interruption to the CBI revenue stream would set some of these economies back by decades. Anything short of doing one’s utmost to address the concerns of the EU is playing with fire.”
The Migration Insider editor pointed out that the halls of power in Washington, Whitehall, and Brussels. Interpol, OECD and Homeland Security are not exactly thrilled by the lowered thresholds for Caribbean citizenship.
He said Peter Vincent, General Counsel for Thomson Reuters and an anti-terror and money laundering expert, told Investment Migration Insider in an interview that his counterparts in government are looking at citizenship by investment with increasing concern, that they don’t have a nuanced view of the situation, and that they may come down hard on the industry if their fears are not allayed.
“In the absence of price differences, countries will compete on quality If the Caribbean programs all had the same price tag, the respective countries would have to differentiate themselves by becoming more attractive destinations and raising the relative value of their citizenships. This would mean working harder to increase the number of visa-waiver agreements and improve the quality-of-life aspects of their islands through, for example, infrastructure development, lifestyle options, tax incentives and so on. This would benefit not only investors but also the local population,” he suggested.
“We didn’t see it coming” said St. Lucia’s Prime Minister Chastanet about the price war.
Several central figures in the CBI-world have publicly espoused the idea of turning the five Caribbean CIPs into a single program.
“It’s not a bad idea, for several reasons: OECS-citizens already have rights of settlement in each others’ countries anyway, which means selling citizenship for one is essentially selling it for all of them, so why not cooperate? It would allow for economies of scale, not only in terms of sharing the cost of due diligence and processing but also on the marketing side, and as such augment revenue margins for the CIP.
It would enable agents abroad to remain agnostic about their clients’ choice of country in the Caribbean because there would be no difference in compensation.
It’s safer with regards to reputational risk. No longer would questionable individuals be able to apply to other Caribbean countries after having been rejected by a sister island.
It would depoliticize the CIPs. A regional body responsible for CIP processing and managed by technocrats would be less susceptible to pressure from the government of any individual Caribbean state,” said Nesheim .
He said: “December is already upon us, and although reports surfaced ten days ago of the Caribbean heads of state convening to tackle the “race to the bottom” among citizenship by investment programs, we have yet to see so much as a statement confirming that the meeting even took place.
I’m about as close an observer of the global investment migration industry as there is and, in my assessment, the Caribbean price war is the most pressing issue of the industry today. Yet we haven’t given it the attention it warrants.”
Photo 1 – Christian Henrik Nesheim
Photo 2 – Dr. Timothy Harris (left) and Mr. Les Khan
