In light of recent changes made to the regulations of the Citizenship by Investment (CIP) , opposition Member of Parliament (MP) Ernest Hilaire is calling for the programme to be immediately discontinued.
Speaking at a press conference on Thursday, the former CIP chairman argued that the new changes places Saint Lucia as a cheap island paradise, as against having it positioned as a high-level option for citizenship.
More importantly, Hilaire said the changes to the CIP regulations creates a greater level of uncertainty and poses a threat to the island’s national security, especially since it is no longer mandatory for investors through CIP to submit a police nor bankers’ reference.
The SLP spokesperson on business and investment also argued that the due diligence process was much more robust and rigid, but with these changes it has placed the entire programme in jeopardy.
Below is Dr. Hilaire’s full statement:
I want to start by stating clearly that the SLP Administration did announce that the Citizenship by Investment Program would be reviewed and where necessary amendments would be made.
This is usual in managing any programme and certainly a requirement for a sensitive initiative as the CIP. So the Labour Party is fully prepared to review and where necessary make suggestions to change the CIP.
What the UWP Administration has done is, that, within one year of operations without the CIP having even being given a chance to properly market and operate, to make some horrendous changes. Changes not to the Act, the substantive guiding principles but to the Regulations.
There is no doubt that the changes to the CIP Regulations as announced will introduce greater levels of uncertainty, scrutiny and security fears about the operations of the CIP.
Let us examine the changes and the consequences which lead me to expressing such a strong statement.
1. Amendment of Regulation 7.
This involves revoking subregulation 3. This provision, which required an Applicant to declare Net Worth of at least US$3Million, sought to ensure that only persons of a certain net worth would qualify for citizenship.
We did not think and still do not believe that we should allow anyone who can just afford the donation level of US$100,000 to qualify for citizenship. We boast that we are selling a lifestyle, that Saint Lucia is premium, that we are not cheap and a free for all, yet the Government proceeds to remove the one regulation that sought more than any other to restrict the CIP to high net worth individuals.
This is no longer a programme that seeks to attract high net worth individuals; Saint Lucia has become a cow which can be milked by any person with $100,000. Let us forget about high net worth, it is a programme for no worth!
It also involves revoking subregulation 7. This is pure madness! I am sorry but I can’t express in any gentler description. Did the Prime Minister read what he was signing?
Subregulation 7 reads “An Applicant for citizenship by investment must satisfy all conditions specified under Section 30 of the Act”
Now let us refer to Section 30 of the Act. This Section provides for the conditions which someone needs to satisfy to qualify. The consequence of this revocation is that it is now no longer mandatory for someone applying to provide the basic information on which an assessment can be made.
It is no longer mandatory to provide a police certificate from their country of origin; you do not even need a bankers reference to apply for citizenship, something that you require to apply for a VISA; the application does not even have to be in English, and does not have to be done by the applicant declaring that the information is correct.
If this is for real and the Prime Minister has signed an SI revoking Subregulation 7, then he has destroyed any semblance of common sense in the administration of the Saint Lucia CIP. On the basis of this change alone the CIP should be discontinued immediately.
1. Amendment of Regulation 9
This change serves to add a subregulation which provides for the Board of the CIP to retain 20% of each monetary contribution made to the National Economic Fund for marketing and promotion. There are two major issues with this change.
Firstly, the Act provides for the Unit to collect fees and it is the Unit which administers the Programme. Therefore why is it the Board which is empowered to retain 20% of all donations?
Secondly and, more importantly, the Act provides clearly what must be done with monies deposited in the National Economic Fund. Section 33 provides the answer. Monies must be deposited into the National Economic Fund and that the Minister MUST present to Parliament each year for its approval how these monies must be used.
The National Economic Fund should be placed within the Treasury with deposits going to the Consolidated Fund and used according to how Parliament has agreed. It is not for the Minister to announce through Regulations how the money is to be used.
Furthermore, the Minister must provide more information on marketing and promotion as suggested. Let me explain why. As it is constituted there are two marketing agencies that are promoting the CIP at their expense wherever it is agreed. In return for each applicant brought in, these agencies get 10% of the donation or the fees. So we need to ask the following –
⦁ Is the established marketing arrangements revoked?
⦁ If not, is the CIP paying 10% to marketing agencies then holding 20% for more marketing? This means for every $100,000 received, the people of Saint Lucia will only get $70,000 for a citizenship!!!
⦁ If so, why would you revoke an arrangement where you pay 10% to now collect 20% to spend on the same marketing? Is there any other agencies which will be receiving payments from the 20%?
1. Insertion of new Regulation 15
We agree with this as it was an oversight in the original Regulations.
2. Amendment of Schedule 1
We agree with this as it was an oversight in the original Regulations.
3. Amendment of Schedule 2 –
This is scandalous. The CIP was position as a high valued option for persons who want to be part of a select few. Therefore as noted by the Leader of the Opposition there were three fundamental provisions – a high net worth, a limit to 500 annually and a sufficiently high donation level.
This amendment together with the other changes makes Saint Lucia a cheap island paradise. It is shameful that the Government will boast that we are now cheaper than Dominica as our new selling tagline and position Saint Lucia as destination that has less value than the cheapest.
We boast of selling Jade Mountain, Ladera, Viceroy, Sandals and soon the Royalton at Cap Estate, all high end options, of being one of the world’s leading wedding and honeymoon destinations, of having world renowned beauty and attractions but we are reduced to be sold as the cheapest destination for citizenship.
Do you remember that it was the same Prime Minister when as Leader as the UWP in opposition said he was opposing the CIP because it had no transparency and accountability? That the Board must be an independent Board with no one appointed by politicians? That ALL the money of the CIP MUST go to the people of Saint Lucia? Remember?
Yet, the same person now as Prime Minister, as Minister responsible for Citizenship by Investment has appointed a Board in the same manner, with no changes to the Legislation to allow a Board appointed as he said is necessary.
The CIP Act requires that by the end of September 2016, a Report should have been presented to Parliament indicating who received citizenship, how much money was earned and what was it used for. To date the Prime Minister has failed to do so. Yet, the Prime Minister says that the CIP has earned EC$6 million but the Chairman of the CIP says it has earned almost US$4m (EC$10.8m).
Rather than meet the requirements for accountability and transparency, the UWP Government is making changes that bring shame and disgrace to Saint Lucia.
Saint Lucia deserves better. The CIP changes are largely insulting and degrading to Saint Lucians.
Whatever happened to Brand Saint Lucia …is it no longer Simply Beautiful but now Simply Cheap?