Basseterre, St. Kitts — Distinguished Colleagues, Honorable Ministers, Special Guests, Excellencies and other members of the diplomatic and consular corps; friends; ladies and gentlemen.
Let me begin by thanking all of you for your time and for participating in today’s event. I am grateful to other jurisdictions for their willingness to join us in St Kitts and Nevis in exploring opportunities to build a more robust architecture based on our joint commitments to greater transparency, enhanced credibility and efficiency in our Citizenship-by-Investment (CBI) programs.
I also wish publicly to thank the entire IPSA team and Mr. Dan Wachtler for organizing this conference. This Conference is intended to provide a conducive and private environment for participating countries in the CBI programme in the Caribbean to come together and to speak freely about the reality and the imperative for a regional response to the expanding Citizenship-by-Investment industry. Participants have taken time away from their desks to listen, to reflect, to gather insights and advise quo vadis the industry. We are grateful for IPSA’s hard work and diligence in bringing this Conference to fruition.
My thanks also to the President of the Chamber of Industry and Commerce, Mr. Damion Hobson, for his remarks. The Chamber has been a consistent friend of and steadfast advocate for the business community and we are glad they are here with us as well.
We are delighted that representatives from Canada, the EU, the UK and the United States, through their High Commissions and Embassy to Barbados and the Eastern Caribbean States, could be here with us today. They are acutely aware of the fundamental importance of the Citizenship-by-Investment programs to our socio-economic development, and likewise, of the significance we attach to our partnership and friendship with them. We take our Citizenship-by-Investment program quite seriously but no more so than our responsibilities to our own nationals and to our international partners and friends. We in St Kitts and Nevis promise that our reform effort shall lead to a product that can stand the test of scrutiny, accountability and time.
We are, as you know, and I have reiterated and emphasized this many times since assuming office, that my government is fully committed to working closely and strategically with you as we strengthen our CBI program and simultaneously address your present and future concerns. We will ensure that our Program represents the best of our country, its values, its aspirations and its obligations. We understand and are ready to promote genuine and sustainable opportunities for our citizens. But more importantly, we will take all legal means available and necessary to frustrate anyone intent on undermining the security and democratic institutions and values of St. Kitts and Nevis as well as our friends and partners.
Although this is well-established, it bears repeating. St. Kitts and Nevis was a pioneer in this field and continues to have one of the most successful international Citizenship-by-Investment programs. It has played a meaningful and can play a transformative role in the development of opportunities and the economy of our twin-island Federation. An IMF report indicates that fees from CBI account “for an increasingly large amount of budgetary revenue, from about 1% of total revenue in 2007 to 22% in 2012 and an estimated 37% in 2013. Revenues were further increased by investment proceeds from the SIDF of 1.1% of GDP during 2010-2012”.
Without this option, the St. Kitts Nevis socio-economic experience would have been dramatically different. So I don’t have to convince you that I remain a supporter of this program. Programs such as these properly set up and appropriately administered and policed, can be an important national asset and vehicle for much needed foreign direct investment. It can also become a potent driver of employment and can contribute to the sustainable growth of the national economy. They can provide the resources for sustaining our debt reduction efforts, modernizing our public infrastructure, supporting indigenous and local entrepreneurship and create a pool of resources for the inevitable rainy day(s).
In St Kitts & Nevis, the CBI program represents roughly 30 plus percent of our annual revenue. Essentially, it is a pillar in the foundation of this country’s future prosperity. However, these programs rise and fall on one simple ideal…trust.
As we all know well, trust can be a scarce commodity. We may build and consolidate it with years of hard work only to lose it in an instance. When trust is squandered, ladies and gentlemen, regaining it can be difficult and lengthy. But the trust that attends this business has many components. As governments, it is incumbent on us to put in place the best regulatory frameworks to protect the system against abuse. We must promote transparency and integrity at all levels. We need robust legal, administrative and oversight firewalls to make sure that only the best candidates ever become citizens.
It requires service providers, advisors, property developers and agents to abide by strict codes of conduct and practice based on common, agreed and verifiable standards. Governments must work together and share best practices. We should never shy away from competition.
Genuine competition is great for the marketplace and there is enough legitimate business for everyone. Competition should never distort our thinking to the extent that we fail to appreciate the value of working together and neither should it engender a race to the bottom, nor a marker for lemons. The ideals of citizenship coupled with the pursuit of genuine business opportunities are laudable and should never be reduced to the notion of a mere sale of passports.
This is not the business in which St. Kitts and Nevis is interested. We must never allow that false and belittling narrative that some attribute to this industry to define our products and countries. We must raise the canvass of discourse. If we do not like what others are saying, we must change the conversation by introducing new regulatory and corporate governance software that force others to view and regard our products and services differently.
A Coalition of the Willing
If we fail to act responsibly and appropriately we allow the detractors to belittle and mischaracterize the legitimate aspirations of our people who have long recognized and rationalized the value and importance of combining opportunities with lifestyle. What we in St. Kitts and Nevis will demand and expect is simple. We want and will work with a coalition of the willing to promote greater transparency, good corporate governance, efficiency, accountability, integrity and exclusivity!
Friends, I must hasten to confess to you that yes when I assumed the Office of Prime Minister of this my beloved and beautiful St Kitts and Nevis, the extent of my dismay multiplied. Why? You ask. Simply because I was troubled by the fact that my country, St. Kitts and Nevis, which pioneered this space in 1984, or more than three decades ago, found itself in a place where it still lacked the requisite systems and processes fundamental to the long-term success and strength of our CBI program. I was concerned too by the IMF assessment of the risk to economic growth and their premonition of “a sudden rapid diminution of inflows related to the CBI program”, including changes in the visa-free access for citizens of St Kitts and Nevis.
I decided immediately that we had to invest the time, energy and resources necessary to restore confidence locally and trust internationally in our program. As I said before, I am a definite supporter of this program. And I will not apologize because I know its potential for transformative development, for empowering our people and supporting our economic resilience and prosperity agenda.
Rebuilding and relaunching the program became priority. I admit to being traumatized by the US FINCEN Advisory of May 2014 and the decision in November 2014 of our longstanding friend and partner, Canada, to impose a visa regime for the citizens of St Kitts & Nevis. In addition, we had heard of other countries including our trusted partner, the United Kingdom, asking questions that went to the heart of the issue of the integrity of our program.
This was dramatic stuff. A clear and potent shot across the stomach not just for St. Kitts and Nevis, but for all of us in the Caribbean with similar programs. Canceling the program is not an option…this would bring the people of St Kitts & Nevis untold hardship. Therefore we are taking action. We are listening to impartial advice. We are engaging our friends. I realize that when one learns from one’s mistakes, embraces the concerns and advice of friends, and embark on a genuine effort to change past behaviors and practices, a lot of positive benefits can result.
I also know that an effectively run Citizenship-by-Investment program, organized with the proper structures and systems, rigid and reliable due diligence practices, transparency, parliamentary and or cabinet oversight and in the full view of public scrutiny, is and can be an invaluable asset for any country. Malta knows it…Cyprus knows it…Canada knows it…U.S.A. knows it. We all have similar programs even if we call them by different names and our primary objectives are dissimilar.
We encourage our fellow Caribbean countries such as Antigua and Barbuda, Dominica and Grenada which are already administering national programs and others who are considering their own programs, to work with us and our friends such as Canada, the United States, the United Kingdom and the EU to build the best programs anywhere. This is a remarkably rewarding industry, poised to grow and benefit many, but opportunity and responsibility must be partners in this enterprise.
Therefore, as the industry grows, it must be better managed, staffed with professionals whose work is guided by transparent rules and regulations. We have to work together to frustrate criminal intent, activities and resources that seek to find any weak link and to exploit it.
Towards a Regional Approach
The establishment of common standards and codes of conduct will ensure that we leave them no avenue to avoid their obligations to our friends and partners or to play one jurisdiction off against the other. And the sharing of information, best practices and personnel will allow us to spot and monitor criminals and flag them appropriately.
Make no mistake, although we are separate jurisdictions, in bad times we will all be seen as simply “Caribbean jurisdictions” and whatever virus infects an individual jurisdiction, we could easily see the contagion erupt throughout the sub-region. We need only reflect on the case of the Lehmann Brothers investment Bank debacle in 2008. I need not remind you that its contagiously catastrophic impact on an entire industry, with far-reaching global consequences, are still present to this day.
It was only through strategic, coherent and on-going Government intervention on a global scale that the banking industry survived. It would benefit none of us personally or nationally if one of our fellow countries offering the citizenship program ran into difficulties.
We need concerted and dedicated action now. We can’t wait for the horses to bolt and then become overly exercised in trying to fix the fences and gates. We have to begin visioning exercises, to develop prescriptive solutions and remedies as well as action to show the world that we are not only open for business but that in terms of transparency and integrity we also mean business.
Hence, I welcome the support of IPSA International in facilitating our presence here this morning to discuss the possible establishment of a common framework for a professional association. We need appropriate regulation. We need reliable and proper due diligence from multiple and reputable international sources. We need codes of conduct. We need regimes that sanction offenders. We need on-going inter and intra-Government cooperation. We need to share best practices and relevant information and importantly also, we need leadership. But we must work together. Our response to the onslaught on our offshore financial sector taught us that we are better together and unity is our strength.
In conclusion, friends, ladies and gentlemen, if you would allow me a few moments, I just want to speak to a local concern that could eventually have a regional impact. It concerns the very pressing issue of the pace of processing applications.
Improvements in Processing
Many of you with us today probably have questions as to what my Government plans to do to address this critical issue. Certainly my focus since becoming Prime Minister has been to restore credibility to our program. However, I want to assure you credibility also means ensuring that people have confidence that when we say we will deliver a product in a certain period, we deliver. Please know that every effort is being made to eliminate the delays that this necessary and urgent process had brought about. Our reforms of our Citizenship Unit will lead to greater efficiency being experienced.
In St. Kitts and Nevis, we are committed to running the best CBI program. This means one distinguished for its efficiency as well as its integrity. We hope that when we would have made all the necessary internal administrative infrastructural adjustments and put the necessary changes in place, St. Kitts and Nevis will again retake its place as the CBI leader.
My commitment to the people of St. Kitts and Nevis is to maintain the highest standards of any program and to deliver the product in a reliably consistent and timely manner. We can and will do both. I also challenge my fellow Caribbean jurisdictions not only to hold me to my word but also to do even better than St. Kitts-Nevis in this regard.
I look forward to a series of very fruitful discussions today and tomorrow and to working with you all to accomplish these important and necessary aims.
I thank you all for your time and kind attention.
I hail the relevance of what we are attempting to do today. Long live collaborative regional action.