Citizenship and residency by investment (CBI/RBI) programs are being used by criminals and the corrupt, who want to launder their money, hide their assets and identity or carry out further crimes.
In addition, criminal exploitation of citizenship as well as residency programmes is “a multi-billion-dollar business” to launder the proceeds of corruption and fraud, evade justice, or access third countries.
Such conclusions have been reached through a joint project of the Financial Action Task Force with the Organisation for Economic Co-operation and Development (OECD) that explores irregular acts related to the CBI/RBI schemes, taking into account fraud and corruption and their impact on public integrity, as well as tax and migrations.
Admitting that these programs potentially lead to economic growth, FATF President T. Raja Kumar said that they, however, are involved in several irregular affairs.
But they can and are being exploited by criminals and the corrupt, who want to launder their money, hide their identity and assets, or carry out further crimes. This report calls on governments operating these programmes to implement a variety of safeguards to ensure these programmes are administered in a risk-sensitive way.
OECD Secretary-General Cormann said that the illicit utilisation of programs that permit foreigners to acquire residency and citizenship by investing constitutes a multi-billion-dollar business to launder the proceeds of corruption and fraud, evade justice or access third countries.
Our joint FATF-OECD work identifies the risks and vulnerabilities around golden visa schemes and offers a series of mitigation measures to help policymakers and programme operators including appropriate due diligence, transparency, and integrity mechanisms.
Several countries offer residency and citizenship programs that are administered by the governments. While the first one allows foreigners the opportunity to acquire residency by investing a specific amount of money, the second one allows internationals to acquire citizenship. The minimum amount of money required for investments differs among the countries.
However, in spite of the fact that it brings significant contributions to the countries’ economies, these programs are often involved in irregular affairs, such as tax evasion, corruption and money laundering, among others.
The report notes that properly managed CBI or RBI schemes can bring benefits to both host countries and people, but in practice, they bring significant risks of illicit acts.
It also points out that these schemes permit criminals to move easily worldwide and assist them in keeping their illegal actions and their identities secret by using shell companies in different places. It also shows the weaknesses of these schemes, like the use of intermediaries, the involvement of several government agencies and misuse by professional helpers, among others.
