PWM’s Financial Times studio held a special episode on “The Mechanics of Due Diligence, World in Crisis: Securing Citizenship by Investment,” where representatives of three major due diligence agencies participated in a panel discussion with Yuri Bender, Editor in Chief, Financial Journalist at Financial Times’ PWM Magazine.
Director of Strategy and Development at EXIGER- Karen Kelly, Chief Operating Officer of FACT Worldwide- Eddy Leviten, and Chief Executive Officer of S-RM Heyrick Bond Gunning discussed the significance of due diligence in citizenship by investment programme.
Director of Strategy and Development at EXIGER- Karen Kelly, who has over a decade of experience in due diligence and Citizenship & Residency by Investment, also discussed the significance of carrying out extensive checks on applicants. She said a host country must take a very in-depth look at the investor to understand who they are and their backgrounds.
Kelly said the due diligence agencies help the countries verify all applicants and scrutinize their profiles, including personal documents, financial documents, and criminal backgrounds, by using on-the-ground intelligence resources by asking questions to people who know the individual.
Furthermore, discussing the contrast between different jurisdictions, Karen Kelly of EXIGER said some countries are actively involved in the due diligence process and asking questions about the new changes. She said Citizenship by Investment Programmes in the Caribbean talk about carrying various levels of due diligence checks.
“It not only involves the third party due diligence agencies but also engages with the regional and international law enforcement, intelligence partners to gather information. They are also mandating immigration agents and marketing agents to carry out KYC- Know Your Customer, which is a significant step,” said Karen Kelly, while referring to Caribbean countries.
She emphasized that the due diligence provider is not there to decide whether a person should be approved or not be approved for citizenship.
Eddy Leviten, who has over thirty years of experience in the creative industries, retail, and enforcement, stated that due diligence agencies carry out multi-layered checks on all applicants, including their dependents over the age of sixteen.
He emphasized that the main applicant and its dependents undergo the same level of scrutinization even if they join later in the application.
“We apply the same level of background checks on dependents as well. We also look at the relationship chart of not just the applicant or dependents but also on their associates, whether they are in a business or within the family,” added Chief Operating Officer of FACT Worldwide.
While explaining the multi-layered process, he added that due diligence agencies do cross-referencing on lots of different databases.
“We check the records in the country of birth, marriages, and deaths of a family members, educational qualifications, employment, if there is any red flag, we quickly notify it to the client.”
“If you are a master criminal looking to avoid prosecution in a country, then this isn’t a route for you; there would be better ways for fraudsters to hide out their assets and move themselves around the world,” he added while referring to the robust due diligence process.
He said some countries offering citizenship by investment programme use two due diligence agencies for cross-referencing. Leviten added that once the due-diligence report is ready, it is similar to reading a person’s life story because it contains so much detail about the individual.
Leviten stated that every country understands that due diligence has to have the highest possible standards. “We provide a report back to our clients; what the client does with the report is what determines if the applicant will be granted citizenship.”
Talking about the common red flags, CEO of SR-M Heyrick Bond Gunning said one of the major red flags is when the individual doesn’t work in the sector from which they derived the major source of wealth. “There are a variety of issues that we see that we flag to our clients (host countries),” he added.
Gunning started his career in the British Army; not only that, he also set up DHL’s operations in Iraq during the end of the Gulf War. He shared some of his experiences during the panel discussion.
Besides this, he stated that the tightening of checks of CBI applications increased in the past few years.
“Applicants also go through checks by the agents before being put through the unit, sometimes, there are double-checks by two companies, and then they are put through security services in the country and in a broader base as well. The ongoing monitoring is critical,” said CEO of SR-M Heyrick Bond Gunning.
Gunning said that despite the challenges caused by the COVID-19 pandemic, Caribbean countries remain committed to the vigorous due-diligence processes. He said the citizenship by investment units of the Caribbean countries became even more focused on their operations and how they run themselves to become more efficient.
Regardless of their small size, Caribbean island countries put all their efforts into ensuring that a robust due diligence process is carried out on all applicants. These countries guarantee to place the safety and security of their citizens as their utmost priority. The moral obligations towards the international community are also among the most precedence for countries offering citizenship by investment programmes in the Caribbean.
The due diligence undertaken by these countries is often comprehensive, strong and meets all the international standards of safety, and security. The process requires inspection of all the supporting documents by the third-party due diligence agencies, both regional and international entities concerned with crime detection. The transparency of these programmes helps maintain high CBI standards.