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The ‘Ins’ and ‘Outs’ of Dominica’s CBI due diligence process

20 January 2017 | Dominica

It is known to many simply as background checks. However, in the world of Citizenship by Investment (CBI), or Economic Citizenship as it is also known, the rigorous process of evaluating an applicant’s legitimacy to acquire citizenship from a country is known as due diligence.

Due diligence is the corner stone of every CBI programme. It is this which validates the integrity of the country’s programme, and most importantly, the perception held of that country in the eyes of the international market. Not only is a country’s reputation important in shaping its diplomatic relations with other world nations, it ultimately affects the strength of the country’s passport as well.

As integral as the process is to every Citizenship by Investment programme, there really isn’t much publicised about what actually happens during those weeks, and at times months that applicants patiently wait for a decision. This void of information has unquestionably led to the criticism that many of these Citizenship by Investment programmes face – at times by nationals from the very same host countries.

In the Caribbean island of Dominica, an island with the second oldest citizenship by investment programme in the region, the due diligence process is one that can take anywhere from three weeks to three months.

“The due diligence for a straightforward person is not the same for somebody, who has many interests, and who has worked in different areas,” said Ambassador Emmanuel Nanthan, Head of Dominica’s Citizenship by Investment Unit (CBIU).

“If that person lived in Georgetown, in Abu Dhabi, and in London, then you have to do due diligence in all the different areas.”

Indeed, as long as an applicant to Dominica’s CBI programme has lived for six or more months in a place, a due diligence report from that place must be developed, and used to assess the individual’s eligibility for citizenship. It is this that differentiates between an application being processed quickly or being delayed.

Currently, Dominica uses four companies to conduct due diligence on its applicants – S-RM, IPSA International, Bishops Services, and Thomson Reuters. All four companies have years of experience delivering intelligence services to some of the world’s leading financial institutions.

S-RM, one of the agencies used, is known for its work in providing business intelligence, risk management, and cyber security services globally. The company employs regional teams in places like Cape Town, Dubai, Hong Kong, Libya, London, Nigeria, and Russia, all of whom do one thing – develop intelligence reports for their regions. “The people who do this – our Russian team doing these reports – that is all they do, so they know exactly what to look for in their region,” said Jamie Smith, Head of the Business Intelligence unit at S-RM.

According to Smith, the company produces between 500 to 600 intelligence reports a month – not just for citizenship programmes, but for other industries as well. The 23 languages spoken in the company, also serves to aid their information gathering process.

When it comes to their work for Dominica’s Citizenship by Investment Programme, S-RM specifically assesses an applicant’s risk for corruption, terrorism, money laundering, political sanctions, and reputation.

“The last thing you want is for Dominica to be a place where people can go and launder their money,” said Smith, who singles out terrorism and money laundering as the risks carrying the most weight on their reports.

When faced with a new report request, S-RM conducts a two-step process to retrieve and assess the individual’s background – the first step of which is a search of the applicant’s public record. As only a small fraction of an individual’s public information is found on Google, the company uses deep-web search engines and tools, an often laborious task, to discover the information. This is further supplemented with information purchased from databases, such as terrorist watch lists, politically exposed databases, litigation databases, and criminal databases.

In the second step, the company uses its teams on the ground to speak to sources. This can include one-on-ones with former business partners, local law enforcement, employees, and friends – the goal of which, is to assess the applicant’s reputation. When the assessment is completed, the company generates a report summarizing its findings, identifying the individual’s type and source of wealth, and ultimately providing a grade for the level of risk the applicant may pose – very low, low, medium, or high risk.

Retrieving information for due diligence reports isn’t always easy said Smith. However, he contends that such occurrences aren’t and end all. “You just have to go about it slightly different, which I suppose slightly affects the timeframe, but not a material effect,” Smith said.

Once the due diligence reports are presented to Dominica’s CBIU from an agency, the decision on whether to grant or deny citizenship to an applicant is determined by a committee, and a formal notice delivered to the applicant’s local agent.

All citizenship by investment applications to Dominica’s CBIU must be made through an approved local agent – the names of which are all posted to the unit’s website.