Citizenship by investment programs 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 But what happens when that status is rescinded?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 Programs
Citizenship by investment programs, 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 the form of a donation to a special fund, purchase of real estate, or investment in public benefit projects.
These programs are widely offered by some EU 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 the 21st century.
The advantages of investment migration are plentiful, including visa-free travel, tax benefits, and expanded business opportunities.
In 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 categories 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.
Takeaway No. 1. Unlike with a passport obtained through a marriage or birth, usually public policy for CBI programs is much stricter and includes additional causes for citizenship revocation.
Takeaway No. 2. There is no specific timeline within which golden passports could be normally revoked. It could happen any time, and there is no statute of limitation in this regard. Imagine investing a significant sum to acquire a second citizenship, only to have it unexpectedly taken away.
Takeaway 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 the family members and vice versa. Each particular applicant’s case is evaluated independently.
Takeaway No. 4. The local regulation concerning economic migration has been dramatically evolving in the past decade, including the EU law. The citizenship by investment programs offering EU citizenship or Caribbean citizenship thoroughly monitor successful applicants to make sure they remain compliant after the second passport is granted.
Takeaway 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 a Glance from A to Z
While each CBI program has its 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
The government authorizing the 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 as a valid ground for the annulment of the passport.
Inter Citizenship strongly recommends unveiling 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 programs. 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 to certain criteria. Those criteria vary depending on a chosen investment option and the CBI program.
When it comes to investment in 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’s investment migration program requires an approved investor to keep the title deeds for 5 consecutive years.
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 number of days in the country after the passport is granted.
Commitment of an act of treason
An act of treason or sedition against the country is considered a serious criminal offense posing a direct risk to national security. Once those circumstances are proved, the revocation of an economic citizenship will take immediate effect.
It is worth noting that the act of treason or sedition is not something that applies exclusively to citizenships obtained through investment migration.
Commitment of serious criminal offenses
This is a quite broad group of grounds, which may include the commitment of a criminal offense on a global scale or an offense that is considered serious according to the laws of a country that issued a second passport.
Among the grounds for a revocation of economic citizenship should be included the following:
- • Commitment of a serious criminal offense in a third country, which leads to imprisonment. A serious criminal offense can include financial crimes, organized crimes like kidnapping or illegal supply of weapons, money laundering risks, etc.; or
- commitment of an act that 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’s good reputation and to comply with EU law or US regulations, most governments tend to initiate a process of passport revocation.
It is worth noting that individuals whose names are included on 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. Program integrity depends significantly on thorough due diligence, effective cooperation, and stringent regulatory oversight.
All parties involved in the investment migration process should ensure that information provided in the course of the application process is accurate, transparent, and not misleading.
