Industry News

Fight or Flight: The Future of Citizenship by Investment

Fight or Flight: The Future of Citizenship by Investment

There is nothing permanent in life —except change. And an important testament to that is the Residency and Citizenship by Investment industry. From its humble beginnings over 40 years ago, to its widespread implementation over the last 10 years, our industry responds to a human necessity that transcends borders and boundaries. And now, this need is as important as ever; while humanity faces uncertain times of war and escalating refugee crises.

 

On March 9, 2022, a legislative initiative report was adopted by the European Parliament, which calls for a better regulation of Residency by Investment Programs and puts forward several recommendations that may change the way Citizenship by Investment Programs operate in the European Union and beyond. The voting of this legislative initiative coincided with the EU sanctions against Russia and Belarus in the wake of the invasion in Ukraine.

 

What is the legislative initiative?

This non-binding initiative of the European Parliament will be presented to the Commission in the framework of the European Commission’s President commitment to turn into a legislative proposal any non-binding resolutions from the European Parliament.

 

What does it cover?

Amongst the many positive aspects contained in  this legislative initiative at an EU level, including the licensing of intermediaries, are the setting of harmonized rules for Residency by Investment Programs, and the call for a total phase out of Citizenship by Investment (CBI) schemes by 2025.

The European Parliament also calls upon the European Commission to propose a legislative act which will call for more burdens of CBI programs in third countries with visa-free travel privileges to the EU, due to perceived inherent security and other risks to the Union.

 

How is this being implemented?

Now that the report is voted, the European Parliament must present it to the Commission which will conduct analysis. There is usually a public consultation and impact assessment of the legislative initiative. There is no set time frame for this phase and while our sources indicate that the ordinary legislative procedure is likely to be triggered in late 2023, this may happen earlier as well.

What is clear is that the full phase out of European CBI programs is set to 2025 and that the pressure on third countries with such programs may be exerted as soon as this year. Once the ordinary legislative procedure is triggered, it may take anywhere between 6 months to indefinitely long to try to adopt a legal act (regulation, directive, or a decision). It is also worthwhile to mention that there is a pathway that leads to ending the whole procedure without adopting any act.

 

What is the impact to our industry?

At Arton, we have been very consistent in our calls to professionalize the industry and introduce self-regulatory or other efficient mechanisms that allow for a delivery of services that positively affect economies and societies, via secure, compliant, lean, accountable, and transparent processes.

These processes should be overarching so that all stakeholders and international partners are convinced that the programs are run in a sustainable and responsible manner.

The legislative initiative is an opportunity to continue such dialogue and to participate in the development of a framework for efficient international cooperation and exchange where good practices are built-in existing and new programs and a government platform for secure and meaningful exchange of data is established.

 

What about the elephant in the room?

On February 26, 2022, the European Commission together with France, Germany, Italy, the United Kingdom, Canada and the United States issued a joint statement in response to the ongoing war in Ukraine, emphasizing European commitment to act against Russian citizens and have made the following pledge:

Third, we commit to acting against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government. Specifically, we commit to taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.’’ European Commission (2022)

While this has no binding effect, some countries were quick to announce that they are temporarily banning Russians from applying to their visa, residency, or citizenship programs. And while the EU – in an unprecedented move – agreed to give residence permits to Ukrainian refugees to stay inside the bloc for at least one year, other countries included Ukrainian nationals in their back list to apply for citizenship for the practical reason of obstacles in performing proper background verification checks.

 

What are the next steps for Arton?

At Arton, we follow these developments closely and as committed advocates for good industry governance and innovative leaders, we applaud any move towards a more lenient management, transparency, security, and better governance.

Since 2019, we have been actively involved in all public consultations and have proactively communicated with the European Commission on key industry aspects. We will keep on doing so in continuation of our established practice to be present when needed.

We will at the same time discuss with industry stakeholders and experts what are the most appropriate actions that could bring us closer to the objectives of the EU institutions while safeguarding the future of the investment immigration industry.

 

The Fight or Flight Webinar

Join us on 22 March 2022 for a dedicated webinar on Zoom to learn more about the road ahead and the opportunities at stake. In confirmed attendance are the Prime Ministers of Antigua and Barbuda and Saint Kitts and Nevis.

The webinar will feature three experts who will cover the following topics:

  • The legislative initiative of the Parliament – subject matter, implications, legal framework, and next steps.
  • Security and compliance – possibilities to address the concerns raised with the INL and high-level analysis of the existing and new measures that can be adopted.
  • Sanctions – due to Russia-Ukraine conflict and the implications for the CIP industry.

Event registration is required. Reserve your spot now. 


Why Eileen Gu’s Story is a Win for Global Citizens Everywhere

Why Eileen Gu’s Story is a Win for Global Citizens Everywhere

2022-02-21
2022-02-21

Why Eileen Gu’s Story is a Win for Global Citizens Everywhere

Instead of debating the star skier’s citizenship status, why aren’t we discussing the bigger

Global Citizenship
Real Estate Investment: The Best Way to Acquire Second Citizenship or Residency

Real Estate Investment: The Best Way to Acquire Second Citizenship or Residency

2022-02-11
2022-02-11

Real Estate Investment: The Best Way to Acquire Second Citizenship or Residency

For those looking for second or third citizenships, real estate investment projects offer efficiency,

Global Citizenship
Dual Citizenship Prevails This Winter Olympics 2022

Dual Citizenship Prevails This Winter Olympics 2022

2022-02-03
2022-02-03

Dual Citizenship Prevails This Winter Olympics 2022

A record number of Olympic athletes have found more mobility, freedom, and opportunity by

Global Citizenship
UAE to Grant Citizenship to Select Few

UAE to Grant Citizenship to Select Few

2020-10-09
2020-10-09

UAE to Grant Citizenship to Select Few

The latest country to leverage its high value citizenship. October 5, 2020 — According to

Global Citizenship