Citizenship by investment programmes provide a path to global mobility and financial opportunities for high-net-worth individuals. But what happens when that status is rescinded? If it is possible at all to talk about economic citizenship being cancelled or revoked?
This is a reality some investors may face today, making citizenship by investment revocation a critical issue to understand. Below in the present article we will examine the legal framework of CBI programs to understand the exact grounds for revocation, as well as give some tips on how to secure yourself and your family against unexpected administrative twists.
Understanding Citizenship by Investment Programmes
Citizenship by investment programmes, sometimes referred to as “golden passports”, provide citizenship in exchange for a substantial financial contribution to the host country. Such a contribution could be made in a form of donation to a special fund, purchase of real estate or investment in public benefit projects.
These programmes are widely offered by some EU states member states like Malta, as well as by the Caribbean and Oceania island states.
The goal is to attract foreign investment, stimulating the country’s economy and supporting development. In recent years more and more often we are talking about investment migration as a new feature of 21st century.
The advantages of investment migration are plentiful, including visa-free travel, tax benefits, and expanded business opportunities.
In the light of recent social and political developments worldwide, the cancellation of a passport by investment becomes a new concern for many investors. The changing political landscape combined with the list of growing sanction lists may suddenly put certain category of investors under the risk of a passport’s revocation.
Citizenship Revocation: Key Facts
First of all it is essential to understand that the list of grounds for citizenship by investment revocation is much more lengthy compared to the citizenship granted by birth or naturalization.
Take-away No. 1. Unlike with a passport obtained through a marriage or birth, usually public policy for CBI programs is much more stricter and includes additional causes for citizenship revocation.
Take-away No. 2. There is no specific timeline within which golden passports could be normally revoked. It could happen any time and there is not statute of limitation in this regard. Imagine investing a significant sum to acquire a second citizenship, only to have it unexpectedly taken away.
Take-away No. 3. Thirdly, the revocation of a passport of one family member does not automatically lead to a revocation of a passport of the rest of family members and vice versa. Each particular applicant’s case is evaluated independently.
Take-away No. 4. The local regulation concerning economic migration has been dramatically evolving in past decade, including the EU law. The citizenship by investment programs offering EU citizenship or the Caribbean monitor thoroughly successful applicants to make they remain compliant after the second passport is granted.
Take-away No. 5. The money invested into the CBI program won’t be returned to the investor whose passport has been cancelled.
Grounds for Revocation at Glance from A-Z
While each CBI program has it own specific regulation, when it comes to cancelling a golden passport most of the countries follow more or less the same list of legal grounds.
Provision of misleading or faulty information
Government authorizing investment citizenship program revokes citizenship once it is established that an applicant initially submitted incorrect information about themselves, their family members or any other personal information.
Even though the provided information de facto may not cause any harm, if such information is misleading or faulty, it could still serve a valid ground for the annulment of the passport.
Inter Citizenship strongly recommend to unveil all personal details during the process of acquiring citizenship in order to make sure the applicant’s profile is complete and trustworthy.
Due Diligence Failures
Due diligence failures pose a significant challenge to maintaining CBI programmes. Background checks might not initially uncover issues that are later discovered. Thus, individuals with criminal records or those involved in illicit activities, including money launderers, can obtain citizenship by investment.
Even though each year the stricter regulations apply towards the application process in general, the default in grounds checks has its place.
Failure to meet post-approval conditions
Once the citizenship by investment is granted, an investor and their family member might need to adhere certain criterias. Those criterias vary depending on a chosen investment option and the CBI program.
When it comes to the investment into a property market, most investment migration programs require a successful applicant to hold the title ownership for the specific period of time. For instance, the EU citizenship granted through Malta investment migration program requires an approved investor to keep the title deeds for 5 consecutive year.
Another way for issued passports to be revoked is failure to make the required investment in full. Usually, an investor is granted a designated period of time within which such an investment should be made.
One of the common grounds for citizenship by investment revocation is failure to spend the required minimum of days in the country after the passport is granted.
Commitment of act of treason
Act of treason or sedition against the country is considered a serious criminal offence posing a direct risk to a national security. Once those circumstances are proved, the revocation of an economic citizenship will take immediate effect.
It worth to be noted that the act of treason or sedition is not something that applies exclusively towards citizenships obtained through investment migration.
Commitment of serious criminal offences
This is a quite broad group of grounds which may include commitment of criminal offence on a global scale or an offence, which is considered serious according to the laws of a country which issued a second passport.
Amongst grounds for a revocation of economic citizenship should be included the following:
- commitment of a serious criminal offence in a third country, which leads to imprisonment. A serious criminal offence can include financial crimes, organized crimes like kidnapping or illegal supply of weapon, money laundering risks etc.; or
- commitment of an act which may significantly disrupt or pose a risk of disruption to the CBI’s public good reputation;
EU and the US Sanctions List
In order to preserve the CBI’s program good reputation and to comply with the EU law or the US regulations, most governments tend to initiate a process of passport’s revocation.
It is worth noting that individuals whose names are included into the sanction list could appeal such a decision. The decision could be challenged either to the Council of the European Union or directly to the General Court of the EU.
Conclusion
Citizenship by investment revocation carries significant consequences for high net worth individuals and wealth investors. Programme integrity depends significantly on thorough due diligence, effective cooperation, and stringent regulatory oversight.
All parties involved into the investment migration process should ensure that information provided in the course of application process is accurate, transparent and not misleading.
