Due diligence helps in verifying, scrutinizing data of citizenship by investment applicants

PWM’s Financial Times studio held an exclusive episode on “The Mechanics of Due Diligence, World in Crisis: Securing Citizenship by Investment”, in which the members of the three major due diligence agencies interacted in a panel to discuss due diligence procedures in citizenship by investment programme with Editor in Chief, Financial Journalist, Yuri Bender at FT’s PWM Magazine.

During the panel discussion, Eddy Leviten, Chief Operating Officer of FACT Worldwide, Karen Kelly, Director of Strategy and Development at EXIGER, and Heyrick Bond Gunning, Chief Executive Officer of S-RM, held talks on the need for due diligence in the CBI programme.

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EXIGER’s Director of Strategy and Development, Karen Kelly, who has several years of experience in due diligence and Citizenship & Residency by Investment, also shared her opinion regarding the need of doing stringent checks on applicants who have applied for secondary citizenship. She also said a host country must deeply review the profile of investors to comprehend who they are and their backgrounds.

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Kelly further said that the due diligence firms assist the nations in reviewing, verifying and scrutinizing the bio-data of all applicants, including personal documents, financial documents, and criminal backgrounds, by using on-the-ground intelligence resources by asking questions to individuals who know the person.

Moreover, while discussing the difference between jurisdictions, Karen Kelly went on to say that some governments are actively engaged in the due diligence multi-layered procedure and asking questions regarding the new developments. She added that CBI programmes throughout the Caribbean include various steps of due diligence checks.

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“It not only involves the third-party due diligence firms but also engages with the regional and international law enforcement, intelligence partners to collect details. They’re also mandating immigration agents and marketing firms to carry out KYC- Know Your Customer, which is a significant step,” said Karen Kelly, whilst referring to countries of the Caribbean region.

However, the due diligence agencies are not there to decide whether an individual should be approved for secondary citizenship or not, underlined Kelly.

Eddy Leviten, who has more than 30 years of expertise in the creative industries, retail, and enforcement, stated that due diligence agencies conduct multi-layered checks on applicants, including their dependents over the age of sixteen, before granting them citizenship.

Furthermore, he emphasized that the principal applicant and the dependents of the main applicant are subjected to go through the same level of due diligence process even if they join the application later.

“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,” Chief Operating Officer of FACT Worldwide added.

Whilst explaining the procedure of due diligence, he further said that the agencies do cross-reference various different databases.

“We scrutinize the records in the country of birth, marriages, and deaths of family members, educational qualifications, employment; if there is any red flag, we quickly notify the client.”

“If you’re a master criminal looking to avoid prosecution in a country, then this is not a route for you; there would be better ways for fraudsters to hide out their assets and move themselves around the world,” he said further while referring to the robust multi-layered process.

He also went on to say that some nations that provide CBI programmes use two due diligence firms for cross-referencing, adding that once the due-diligence report is prepared, it is like reading a person’s life story because it contains a lot of information about the individual.

Every country, according to Leviten, understands that due diligence’s multi-layered process has to have the highest required standards. “We send a report back to our clients; what the client does with the report is what determines if the applicant will be granted citizenship.”

While talking regarding the common red flags, Heyrick Bond Gunning, CEO of SR-M, said one of the major red flags is when the person does not work in the area from which they derived the primary source of wealth. “There are several issues that we see that we flag to our clients (host countries),” added Gunning.

In the midst of the panel discussion, Gunning shared some experiences of his life. He shared that he began his career in the British Army; not only that, but he also set up operations of DHL in Iraq during the end of the Gulf War.

Besides this, Gunning also stated that the stringent checking of CBI applications has increased in the past years.

CEO Gunning said, “Applicants also go through several checks by the agents before being put via the unit, sometimes, there are double-checks by two companies, & then they are put through the security services in the nation and in a broader base as well. The ongoing monitoring is vital.”

Despite facing several difficulties caused by the COVID-19 pandemic, Caribbean countries remain committed to the robust due-diligence procedure. He added that the Caribbean countries’ CBI units have become even more focused since the dawn of the pandemic on their operations and how they run themselves in order to become more efficient.

The due diligence process of these countries is frequently comprehensive, robust, and meets all international safety and security standards. The procedure involves reviewing of all the supporting documents by the third-party due diligence agencies, both regional and international entities concerned with crime detection as part of the procedure. The transparency of these programmes contributes to maintaining high CBI standards.

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