(MENAFN - Caribbean News Now) By Caribbean News Now contributor
DUBAI, UAE — A new report on Saturday by the widely-read Gulf News detailing the rampant abuse of the St Kitts and Nevis citizenship by investment programme (CIP) has created a major stir in the Middle East, a significant source market of applicants wishing to obtain second passports.
Although much of the detail has previously been published by Caribbean News Now, the latest report by features editor, Mazhar Farooqui, entitled "Caribbean citizenship dreams in jeopardy?" includes new, albeit self-contradictory, attempts at explanations by the head of the St Kitts and Nevis Citizenship by Investment Unit (CIU), Les Khan.
In response to an earlier pledge by former St Kitts and Nevis prime minister, now leader of the opposition, Dr Denzil Douglas, that on return to power all citizenship applications under the current administration would be be reviewed and any found to be fraudulent or underpaid would be revoked, Khan ruled out any such possibility.
'Let me say this, nobody will be stripped of their citizenship," he said, without explaining why he thinks a civil servant is able to bind or limit an elected government to such a position, contrary to the relevant statutory regulations.
In fact, St Kitts and Nevis law is clear on the issue: if an applicant makes a false statement or omits information, he or she may be deprived of citizenship pursuant to the provisions of the Citizenship Act of 1984. Further, any such offender may be prosecuted under the Perjury Act 2005.
The regulations also provide for a review process as promised by Douglas.
On Sunday, the opposition St Kitts-Nevis Labour Party (SKNLP) responded to Khan's comments by issuing the following confirmation of its position on the matter:
"The SKNLP government will review all citizenships granted during the period when our citizenships were being undersold and subjected to illegal practices including fraud, etc, as was reported during the Timothy Harris regime. As long as these atrocities have been verified, the SKNLP government will be duty bound to take the necessary actions including suspending and withdrawing the use of the related passports under the relevant laws and regulations. "The SKNLP government shall return credibility and trust to our economic citizenship program so that holders and participants will be proud of it."
When asked by Gulf News to explain how overseas agents were selling St Kitts and Nevis citizenships way below the legitimate price, Khan simply said, 'You [should] pose that question to the agents," thus again offering no assurance that the CIU is actively policing this illegal practice, as it is also empowered to do under the regulations.
Khan also claimed that it was not true that funds were being illegally diverted from approved real estate projects, saying that the government has an Escrow Account Bill in place to safeguard the programme.
'The funds are held in escrow accounts in St Kitts and we ascertain everything before issuing a citizenship certificate,' he said.
However, notwithstanding his assertions to Gulf News that investor safeguards were already in place, Khan admitted at another meeting during the same recent visit to Dubai that "the regulations weren't strong enough to ensure that payouts from escrow were based on construction levels".
Referring to a statement by attorney general Vincent Byron at the same meeting with economic citizens and agents in Dubai that the government is taking the necessary steps to strengthen the legislation governing the operation of real estate escrow accounts, Khan stated that the new legislation will significantly strengthen the country's citizenship programme by paying particular attention to construction and the payout of funds in escrow.
"It will ensure that any client purchasing a real estate option, the purchasing sale agreement must always be at the face amount of the investment – that being either the $200,000 or $400,000. An escrow agreement must be in place for the same amount. In the new legislation all real estate transactions will have to go into escrow and then released from escrow upon certification of the various stages of completion of the project. So basically, the escrow agreements will have payout stages,' Khan explained.
Khan said that the new legislation will tighten the government's position and would 'ensure that applications placed for real estate would be used for construction. This is different to what was done in the past".
Sam Bayat, CEO of the Bayat Group in Dubai, who was quoted extensively in the Gulf News article, commented subsequently on Linkedin:
"Earlier, in November, Dr Douglas, former PM of SKN accused the current administration of making the CBI programme less transparent and less accountable and also noted that the government has failed to implement recommendations including establishing an independent commission for oversight of the CBI programme. Later in January, Dr Douglas promised when elected he will revoke the citizenship of any applicant who is found to been illegally granted St Kitts and Nevis CBI. It appears the three consultancy firms involved in the above are still operating under government license and are not been investigated."
As Gulf News pointed out, the CIP is an important source of revenue for St Kitts and Nevis, but since hitting its peak in 2015, income from the programme has been on the decline:
Source: Dwyer Astaphan, former St Kitts-Nevis minister and attorney at law
Meanwhile, the local service provider unwittingly used by overseas citizenship agents Savory & Partners to obtain a genuine approval letter from the CIU, which they (Savory) then used to forge a fraudulent document, has told Caribbean News Now "emphatically and categorically that it has no involvement whatsoever in any fraudulent activity and was not involved in any way with the altering of a St Kitts-Nevis government issued approval letter."
The local service provider explained that, in mid-November 2018, it was brought to its attention that an approval letter it had received from the CIU on 15 October 2018, and which it had forwarded to Savory & Partners in Dubai on behalf of a citizenship applicant, had been altered from its original form.
Upon learning of this apparent act of forgery, the local service provider immediately met with the head of the CIU to apprise him of the development, wrote an official letter to the CIU documenting the matter, and requested that the matter be urgently investigated to ascertain the party or parties involved in the apparent forgery.
In late November 2018, the local service provider said it was then subsequently made aware of compelling evidence pointing to the apparent source of the forgery.
Based on this evidence and in keeping with its highest standard of integrity and ethical business practices, the local firm terminated its service agreement and business relationship with Savory and proceeded to close all ongoing work with the Dubai agent.
The local service provider again promptly met with the CIU and wrote officially to the Unit releasing all files associated with Savory from under its supervision.
The local service provider confirmed it has no formal business relationship with the developer involved in the fraudulent transaction and was not party to any arrangements or agreements between the developer and Savory.
The firm said it "wishes to denounce the apparent abhorrent and unsavoury acts that are being perpetrated against the St Kitts and Nevis CIP by a handful of bad actors", adding that it "awaits the CIU and the government in taking decisive and robust action against these less than savoury actors".
Unfortunately, the local firm in question may have to wait a long time for such "decisive and robust action" by the government since, as noted, the CIU has been aware of the indisputably fraudulent activity by Savory for some three months but has yet to take any steps to suspend or terminate them from participating as authorised overseas agents under the CIP, pending the outcome of the criminal investigation it claims to have initiated and also in the light of evidence that Savory has been actively involved in offering St Kitts and Nevis citizenship at illegal discounts.
In fact, the opposite seems to be the case.
In a somewhat bizarre turn of events, Times Caribbean, a publication believed to be controlled, along with a number of other local media outlets, by Prime Minister Dr Timothy Harris, recently published a press release promoting the merits of the CIP, including a promotional graphic created and used by none other than Savory.