Last Updated on October 11, 2019, 5:43 AM AST by Chris Matthew
Dominica’s Citizenship by Investment (CBI) Programme provides citizenship to foreign investors who make direct contributions to the nation or who invest, through an escrow account, in pre-approved real estate projects. Ranked among the world’s most transparent and efficient, and having provided a ‘lifeline’ in the aftermath of natural disasters such as Tropical Storm Erika and Hurricane Maria, the CBI Programme is normally a source of pride for Dominicans.
A lonely voice amidst a sea of praise has been that of opposition leader Lennox Linton, whose record has been one of repeatedly intimating that the CBI Programme is run dishonestly by both the Government and participating stakeholders. And, with elections drawing near, Linton’s voice has grown louder, culminating in the recent suggestion that over EC$1.2 billion has gone “missing” from CBI Programme accounts for FY 2018-2019.
Linton’s suggestion, however, has failed to convince locals. “Loud does not always mean correct,” says Euigene Dwight, a Dominican expat living in the United Kingdom, “and claims shouldn’t be taken at face value but rather analysed in the context of tangible facts.”
Anthony Astaphan, who was made a Senior Counsel by the Eastern Caribbean Supreme Court in 1999 and was formerly the President of the Bar Association of Dominica, is another person who has made his reservations about Linton clear.
In a statement published on 12 September, Astaphan said Lennox Linton had a fractured track record “of deception,” and called the EC$1.2 billion suggestion a “con-job” that had no regard for the practical impossibility of stealing such an amount of money. “The Government and escrow accounts [for the CBI Programme] are at the National Bank of Dominica (NBD). No prime minister or minister is a signatory to any of the CBI accounts, escrow or otherwise,” he said. He further characterised Linton’s allegation as “mind-boggling,” requiring “collusion with senior bank officers, senior public officers, investors and the developers” and “the corrupt participation of the clearing (US banks) and receiving banks.”
Astaphan also discussed how Linton reached the EC$1.2 billion figure, stating that Linton had “fabricated a fictional figure of US$50,000” and multiplied it by an estimated number of applicants (rather than applications) for FY 2018-2019.
Astaphan is not the only person to have had to correct Linton on the workings of the CBI Programme. On 9 September, Gregor Nassief owner of Secret Bay (a development approved under Dominica’s Programme) wrote an open letter to Linton, chastising him for engaging in “at best intellectual dishonesty and at worst intellectual incompetence” with respect to Dominica’s CBI Programme.
Nassief said that only a small part of the money involved in the real estate option is received by the Government; in a standard payment for a single applicant, US$200,000 goes to the developer’s escrow account and US$25,000 goes to the Government in the form of fees. Funds in the escrow account, although administered by the Government as a signatory to the account, belong to the developer, and not to Dominica.
Nassief pointed out that these funds are not “missing” but that they are rightly excluded from the Government’s 2018-2019 estimates: “if the Government was to include in its public accounts, based on how developer contracts are structured, the supposed ‘missing’ money, it would be fraudulent because that money does not belong to Government, it belongs to the developers.”
Nassief, who characterised the process of obtaining pre-approval status under Dominica’s Programme as “arduous,” applauded the Government’s safe administration of the escrow accounts. He said funds are “only released to the developer if there is correlating progress in the project” – a control method that “prevents a developer from receiving money and not putting it into construction, something that has happened repeatedly in another [sic] jurisdictions.”
“Costs and fees for the CBI Programme are available for all to see on the Citizenship by Investment Unit’s official website, and are spelled out in Dominica’s Regulations,” says Dwight. “On top of that, a recent PricewaterhouseCoopers (PwC) report tells us that 2,059 applications were approved in 2018. Figure 1 in this report tells us that around 1,600 applications were contributions and 460 were real estate investments. Given this information, the EC$1.2 billion figure is plainly an overstatement – what worries me is that it looks like the overstatement may be a result of malice, rather than mistake.”
The PwC report refers to 2,059 applications, not to the number of people who obtained citizenship. One application under the CBI Programme does not necessarily translate into one person obtaining citizenship of Dominica. One application can include a single applicant, but it can also include a main applicant and any number of family members who qualify as dependants. A qualifying dependant can be, for example, the main applicant’s spouse, children under 18, children between 18 and 30 in full-time attendance at a recognised institution of higher learning and fully supported by the main applicant, and parents aged 55 or above who are living with and fully supported by the main applicant.
“It is my understanding that the opposition is using Dominica’s 2019 Official Gazette, which states that 3,961 individuals received citizenship of Dominica in the five months from August to December 2018. This is not inconsistent with the PwC report, which is talking about applications, not total number of individuals,” explains Dwight. “To make accurate estimations when calculating revenue however, the more important number is applications rather than applicants.”
Although a single applicant who applies under the donation option must pay at least US$100,000, a husband and wife need only pay US$175,000 (i.e. US$87,500 per person), and a family of four people need only pay US$200,000 (i.e. US$50,000 per person). Furthermore, a 10% commission is paid to Authorised Agents.
Under the real estate option, the Government does not receive the US$200,000 minimum investment required by law, which is paid into the developer’s escrow account. Rather, the Government receives real estate ‘Government fees.’ A single applicant must pay US$25,000 in Government fees. A family of up to four people must pay US$35,000 (i.e. US$8,750 per person), while a family of up to 6 persons must pay US$50,000 (i.e. US$8,333 per person).
Chris Matthew is a well-seasoned expert in feature writing, with a strong focus on covering international updates.. He blends his creative thinking with a journalistic mindset to report on events and issues across the world with precision and accuracy.
