More questions raised over Antigua-Barbuda connection with UAE project

ST JOHN’S, Antigua — For the second time in less than three months, the government of Antigua and Barbuda has attempted to clarify the relationship between its citizenship by investment programme (CIP) and a real estate development in the United Arab Emirates, which appears to claim that purchasing homes in the project somehow qualifies persons to become citizens of Antigua and Barbuda.

In late December last year, in a diplomatic note sent to its international partners, the government of Antigua and Barbuda made it clear that, as it relates to the Sweet Homes’ project, there is no automaticity whatsoever between persons purchasing such homes and the acquisition of Antigua and Barbudan citizenship.

However, the government was forced to respond again on Friday to a report in local media that raised new questions about the UAE project.

Chief of staff, Lionel Hurst, said: “There is no requirement under the Antigua and Barbuda citizenship by investment programme for anyone to purchase any of the units under the Sweet Homes project in the United Arab Emirates (UAE). The contractual arrangement with the UAE project is that it can refer persons to the CIP for consideration, and would be paid a commission for doing so in an open and transparent manner.”

Hurst emphasized that persons referred to Antigua and Barbuda’s Citizenship by Investment Programme (CIP) by the Sweet Homes project are required to invest in Antigua and Barbuda, in accordance with the laws of the country.

He said that there are only three ways in which any applicant could be considered. These are by: (1) investing at least US$400,000 in real estate in Antigua; or (2) contributing US$200,000 to the National Development Fund; or (3) making a business investment of US$1.5 million in the economy.

He stressed that: “All applicants for citizenship by investment from the Sweet Homes project who have been successful have paid the full sum of money due under the programme, consistent with the law.”

Hurst said that the officers of the CIP unit have requested sight of the advertisement by Sweet Homes and, if it is in anyway misleading, Sweet Homes will be instructed to correct it.

However, the claims by Sweet Homes are readily accessible on its website and, although the official position of the Antigua and Barbuda government seems to be that any purchase of a Sweet Homes unit does not confer any actual eligibility for citizenship, merely the eligibility to apply, the website in fact claims: “Buy this unit and get Citizenship/Passport of Antigua & Barbuda.”

It goes on to say: “(Subject to due diligence and approval from Citizenship by Investment Program Unit-Government of Antigua and Barbuda)” in small print and then that “The Government of Antigua and Barbuda on 19/11/2014 agreed to extend its territorial jurisdiction towards the Ajman Uptown Project Al-zahya, Main sheikh, Mahammad Bin Zayed Road, Ajman, UAE, pursuant to section 42 of the finance Administration Act 2006”.

No mention is made of only being eligible to apply and, if that is the case, no explanation is offered as to how a purchase of a Sweet Homes unit actually benefits a prospective applicant for Antigua and Barbuda citizenship, since everyone (with some exceptions) is “eligible to apply”.

Furthermore, the reference to Antigua and Barbuda extending its “territorial jurisdiction” to the UAE has also raised questions of sovereignty in the Emirates.

Then on another page, the website goes on to say: “Buyers of Units in Sweet Homes’ Ajman Uptown project will be eligible for citizenship in the twin-island nation under CIP,” again, no qualification about being eligible only to apply.

The same page continues: “The government of Antigua and Barbuda agreed to extend its territorial jurisdiction towards the Ajman Uptown project pursuant to Section 42 of the Finance Administration Act 2006, for the purpose of providing funding a contribution of US$200,000 to the National Development Fund (NDF) under the Citizenship by Investment Project (CIP) law. Wherein it was agreed that the buyers of the units of the ‘Ajman Uptown Project’ will be eligible for citizenship of Antigua Barbuda (subject to due diligence and approvals by CIP unit of the government of Antigua and Barbuda) under CIP, NDF for each principal applicant, including spouse, dependent children and dependent parents over 65 years of age who form part of the applicant’s family.”

While it refers to a US$200,000 contribution to the NDF, it does not make it clear that any purchaser has to come up with that amount in addition to the purchase price and, further, it again refers to eligibility for citizenship, not merely to apply.

There is also what is assumed to be an accurate Arabic translation of the English text.

According to Antigua and Barbuda Prime Minister Gaston Browne, his government has a fully transparent, non exclusive policy to licence developers with at least 1,000 condominiums to serve as suppliers for the CIP NDF. These suppliers are paid a commission of 10 percent of the US$200,000 that is collected from each applicant.

“Sweet Homes cannot process applications and therefore has to refer all applications to a local processor who is required to be an Antiguan citizen by law. The application is then processed by the CIP Unit which is responsible for conducting the due diligence utilizing the expertise of reputable firms in the UK, US and Canada. Sweet Homes’ real estate customers in Ajman do not qualify for citizenship under our US$400,000 real estate option. Only real estate projects that are domiciled in Antigua are eligible,” Browne explained.

While all of these conditions may eventually be made known to an actual or prospective purchaser, these claims by Sweet Homes have generated some significant consternation around the world, specifically that such claims may undermine Antigua and Barbuda’s CIP, which is relatively new and is designed to contribute to infrastructure, the growth and development of tourism sector, as well as reduce unemployment in Antigua.

The real estate projects associated with this program are set to contribute to the economy of Antigua by creating new jobs in the construction industry, the post-construction services industry, trade in building materials and other direct and indirect benefits to the country when projects are constructed and operated in Antigua. The spirit of the program is to bring investments to Antigua and reduce the high unemployment that troubled the previous administration.

Meanwhile, the eight-year-old Sweet Homes project itself reportedly has a somewhat troubled history, including several lawsuits, alleged corruption and other shortcomings. The project reportedly has no electrical power and is not scheduled to receive any means of electricity and would therefore be operated using generators, thus adding substantial cost to the new owners.

Moreover, the actual value of the project units is reported to be substantially less than what is being asked (allegedly only some 15-20 percent of the actual sales price), which may be why the developers are trying to tie in Antigua and Barbuda citizenship as an added value.

“What the principals of Sweet Home have done is that they have twinned the promotion of our NDF program with their real estate promotion in Ajman. They have in excess of 7,000 condominium units, which they must spend millions aggressively to promote and sell,” Browne said.

However, the fear has been expressed that any deficiencies in value in the Sweet Homes project, or other failings, may lead to a backlash against the Antigua and Barbuda government, which may be perceived to have sponsored or otherwise been involved in the UAE project.

Browne dismissed such concerns, saying that the aggressive promotion by Sweet Home, which is targeting non citizens of the UAE, has created consternation for other suppliers operating in the UAE, who perhaps do not have the means for such large scale promotion.

“The uproar is in essence, a competition issue which will resolve itself as the other competitors find innovative and creative responses,” he added.

However, Browne said on Sunday that, where there are misleading or ambiguous statements relating to the CIP, they must be corrected and that all promotional material including the Sweet Homes website must be adjusted to capture the precise essence and regulations governing the program.

Also on Sunday, Antigua and Barbuda’s Foreign Minister Charles ‘Max’ Fernandez echoed Browne’s sentiments, saying that, not only must all relevant advertisements be vetted by the CIP unit, legislative changes may be needed to ensure that this is done by all CIP agents, along with a method to translate all foreign language advertisements to ensure accuracy.

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