Citizenship by Investment Programs should not be used by those engaging in money laundering
OECD Citizenship Program Recommendations Addressed by IMC
Following a series of recommendations released by the Organisation for Economic Co-operation and Development (OECD) regarding citizenship programs, the Investment Migration Council provided a statement with their response.
The OECD is an organisation designed to promote policies that will benefit the economic and social welfare of people across the globe. The Investment Migration Council (IMC) is an association for stakeholders involved in investor immigration and citizenship-by-investment programs. The IMC helps to formulate worldwide standards for investment-related citizenship programs.
The IMC states that it agrees with the OECD that it is important that Citizenship by Investment Programs (CIP) not be used by those engaging in money laundering or other crimes or terrorism. The IMC says tax is not an issue for most of the applicants for dual citizenship through CIP as these individuals generally do not change their legal tax residences. It claims existing EU residents account for the majority of tax-related movement within the EU, rather than new citizens through CIP. The organisation recommends that OECD better evaluate tax statistics to determine the true proportion of taxpayers involved in CRS who became citizens through CBI programs.
The IMC goes on to note that only a small number of citizenships are granted through CIP. In Europe, for example, the 28 member states of the EU annually grant around 1 million citizenships per year. Of them, only about 800 of those citizenships are through CIP. There are plenty of other ways to gain citizenship that don’t require investments, meanwhile, applicants of CIP still have to pass rigorous background screenings before being approved for citizenship. IMC further clarifies that a larger percentage of people from many of the highest risk countries, from a tax and financial crime standpoint, are admitted through non-CIP application processes.
Although the IMC agrees with OECD recommendations to improve reporting from financial institutions and increase due diligence standards, it highlights how the OECD should do that for all applying for citizenship, rather than focusing only on applicants through CIP. The organisation states that changing standards only for CIP “cannot be justified by any means other than a direct intent to hurt specific countries, including many OECD member states.”
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