Financial Times’ Private Wealth Management Magazine shines spotlight on Due Diligence in Citizenship by Investment Countries

The Financial Times’ Private Wealth Management (PWM) magazine recently hosted a virtual panel discussion on the impact of global risks on countries with Citizenship by Investment (CBI) programmes.

As part of its PWM Perspectives series, the four-part panel discussion shares the views and insights of notable experts from major due diligence investigation agencies.

Moderated by Yuri Bender, editor in chief of the Professional Wealth Management magazine, the series shone a spotlight on due diligence process in the citizenship by investment industry amid the rising geopolitical risks.

Yuri Bender was joined by Karen Kelly, director of strategy and development at Exiger; Eddy Leviton, chief operating officer at Fact WorldWide and Heyrick Bond Gunning, chief operating officer at S-RM.

Chapter one: The mechanics of due diligence

The first episode explores the due diligence processes used by migration hubs to verify the credentials of individuals and their families who are looking to secure second citizenship.

Citizenship by investment (CBI) programmes are an effective method of raising capital investment, attracting talent and experience that help to boost regional economic growth. However, any significant inflow of funds brings a risk of money laundering or financial impropriety if not carefully vetted. Effective enhanced due diligence processes are imperative to ensure that only reputable and honest investors are allowed to obtain citizenship.?Due diligence ensures that each applicant undergoes thorough auditing to mitigate any security, financial crime, and reputational risks.

“When a country is considering bestowing citizenship on an investor, it requires a very in-depth look at that investor. Who they are, what their background is, and where their funds are coming from,” said Karen Kelly.

Third-party due diligence firms look into these applicants on an in-depth level. This includes document verifications, such as marriage and birth certificates, degrees, and business qualifications. A further step is looking at any criminal convictions, any hits on any sanctions and watchlists. Finally, the applicant’s source of wealth and reputation are scrutinized by using both open sources and on-the-ground resources.

“We apply scrutiny to both the main applicant and the dependants, as well as close family members. Like political affiliations, political exposure, negative media, have there been criminal convictions against those family members? Those checks are carried out across all the applicants and then the relationships as well. We look at relationship charts between not just applicants and dependants, but also associates within the families,” says Eddy Leviton.

“People’s circumstances change and what we as intelligence agencies do is provide countries evidence of a snapshot in time. Lifetime monitoring is something CBI Units are now doing to stay on top of any potential challenges and issues that may arise,” says Heyrick Bond Gunning.

Caribbean CBI nations offer some of the most robust due diligence processes in the industry as some of their citizenship by investment programmes have been around for decades, as is the case with St Kitts and Nevis’ Programme which was established in 1984 and that of Dominica which was established in 1993.

These countries realise the importance of protecting and enhancing not only their reputation in the international community but also ensuring that their citizens and applicants know that they are investing in reputable and trusted brands for their businesses and families.

Stay tuned for chapter two in the series, which will be looking at sanctions and anti-money laundering measures.