PWM’s Financial Times studio carried a special episode on “The Mechanics of Due Diligence, World in Crisis: Securing Citizenship by Investment,” where three due diligence agencies representatives participated in a panel discussion along with ‘Yuri Bender, Editor in chief, Financial Journalist at Financial Times PWM Magazine.
Eddy Leviten, Chief Operating Officer of FACT Worldwide, Karen Kelly, Director of Strategy and Development at EXIGER, and Heyrick Bond Gunning, Chief Executive Officer of S-RM, discussed the importance of due diligence in the Citizenship by investment programme.
Karen Kelly, EXIGER’s Director of Strategy and Development, who has over a decade of experience in due diligence and Citizenship & Residency by Investment, also discussed the importance of conducting extensive checks on applicants. According to her, a host country must conduct an in-depth investigation of the investor in order to understand who they are and what their backgrounds are.
Furthermore, Kelly stated that the due diligence agencies help the countries to verify the accounts of all applicants and examine their profiles, including personal documents, financial documents, and criminal backgrounds, by using on-the-ground intelligence resources by asking questions to people who know the individual.
Examining the difference between various jurisdictions, Karen Kelly of EXIGER said some countries are actively involved in the due diligence process and asking questions about the new changes. She said Citizenship by Investment Programmes in the Caribbean talk about carrying various levels of due diligence checks.
“It engages not only third-party due diligence agencies but also regional and international law enforcement and intelligence partners to gather information. They also require immigration agents and marketing agents to carry out KYC- Know Your Customer, which is a significant step,” said Karen Kelly, referring to Caribbean countries.
She highlighted that the role of the due diligence provider is not there to decide whether a person should be approved or not be approved for Citizenship.
Eddy Leviten, who has an experience of thirty years in the creative industries, retail, and enforcement, said that due diligence agencies carry out multi-layered checks on each and every applicant, including their dependents over the age of sixteen.
He highlighted that the main applicant and dependents are subjected to the same level of scrutiny, even if they join the application later.
Furthermore, the Chief Operating Officer of FACT Worldwide said, “We always do the same background checks on dependents. We also go with the relationship chart, not only to the applicant or their dependents but also to their associates, whether they are in a business or within the family.”
While explaining the multi-layered process, he added that due diligence agencies do cross-reference many different databases.
“We check the records in the country of birth, marriages, and deaths of family members, educational qualifications, employment. If there is any red flag, we quickly inform the client.”
Furthermore, while referring to the robust due diligence process, he added, “If you are a master criminal looking to avoid prosecution in a country, this is not the route for you; there are better ways for fraudsters to hide their assets and move around the world.”
He stated that some countries that offer Citizenship by investment use two due diligence agencies for cross-referencing. Leviten went on to say that once the due-diligence report is completed, it’s like reading a person’s life story because it contains so much information about the individual.
He further stated that every country is well aware that due has to have the highest possible standards. “We provide a report back to our clients; what the client does with the report is what decides if the applicant will be granted citizenship.”
While discussing the common red flags, CEO of SR-M Heyrick Bond Gunning stated one of the major red flags is that when applicant doesn’t work in the sector from which they emanated the primary source of wealth. “There are the other issues that we see that we flag to our clients (host countries),” he added.
Gunning began his career in the British Army, and he also established DHL’s operations in Iraq at the end of the Gulf War. During the panel discussion, he shared some of his experiences.
Despite this, he stated that the tightening of Citizenship checks of CBI increased in the past few years.
“Applicants also go through checks by the agents before being put through the unit, sometimes, there are double-checks by two companies, and then they are put through security services in the country and a broader base as well. The ongoing monitoring is critical,” said SR-M Heyrick Bond Gunning, CEO.
Gunning said that many challenges are caused due to the COVID-19 pandemic, and Caribbean countries still remain committed to the process of due diligence. He said the Citizenship by investment units of the Caribbean countries became even more focused on their operations and how they run themselves to become more efficient.
Regardless of their small size, Caribbean island countries make every effort to ensure that all applicants undergo a thorough due diligence process. These countries promise to make the safety and security of their citizens a top priority. Moral obligations to the international community are also among the most essential considerations for Caribbean countries offering Citizenship by Investment programmes.
The due diligence undertaken by these countries is often comprehensive, robust, and meets all the international safety and security standards. The process needs inspection of all the supporting documents by the third-party due diligence agencies, both regional and international entities concerned with crime detection. The transparency of these programmes helps maintain high CBI standards.