A news report earlier in the month should occupy centre stage among all the political parties in Grenada seeking to govern the island over the next five to ten years.
It concerns an ultimatum given by the European Commission demanding that all five Eastern Caribbean countries – Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, and St. Lucia – phase out or structurally end their Citizenship by Investment (CBI) programs by June 1, 2028.
Under the EU’s revised visa suspension mechanism, operating a CBI program in any of the five states would be grounds for suspending visa-free access to the Schengen Area.
All the political leaders and their parties in Grenada should be concerned about this development in light of the revenue the sale of passports bring into the Treasury.
The ruling National Democratic Congress (NDC), as well as the opposition New National Party (NNP) and the Democratic People’s Movement (DPM) would have to address the issue since this would have serious implications on the promises made to the electorate in the upcoming general election.
A significant drop in CBI revenues will affect employment on the island as one implication can be on the construction of hotels.
It is well-known that several of the most recent hotel projects were financed from revenues generated from the sale of passports.
The Levera project, the two new hotels in La Sagesse, the Mt Hartman development and the stalled hotel project overlooking the Grand Anse beach that once involved former Ambassador Warren Newfield came about through the CBI programme.
The latest action by the EU against the Eastern Caribbean reminds us of the banana trade which took a significant blow by the action of our former colonial rulers.
Some of the islands like St Lucia and Dominica had to find alternative revenue in the face of the massive decline in banana production.
Our leaders would have to look for ways and means to navigate the affected islands in the face of the new “sanctions” being imposed on them from the major capitals in Europe.
The grim warning is that if the five OECS islands refuse to close down their CBI programs, the EU may suspend their visa-free access to the Schengen Area within the next two years.
This does not mean that visa-free travel or the programs will be terminated immediately as the European Commission has proposed a 24-month transition period, while these governments continue negotiations with EU authorities.
There has been no official comment or statement from Grenada on the issue.
However, the Prime Minister of Antigua and Barbuda, Gaston Browne has said that the CBI program remains one of his country’s main sources of non-tax revenue, and the government is not prepared to agree to its closure without discussions on possible compensation.
The revenue from CBI in these islands is very huge – accounting for as much as 36.6% of GDP in Dominica and around 22% of GDP in St Kitts and Nevis.
It is acknowledged that Visa-free access to the Schengen Area is a major catch for businessmen wanting to gain access to these European nations.
Any threat to this can impact on the sale of CBI passports.
For us in the Eastern Caribbean, we cannot play blind because over the most recent years, the European Union has steadily increased its scrutiny of the CBI programmes.
They started off making all sorts of noise about the quality of the Due Diligence procedures, verification of applicants’ source of funds, security screening, and the exclusion of individuals subject to sanctions.
The fact of the matter is that all sorts of rogues laid their hands on passports from Dominica, Grenada, St Kitts and Antigua and Barbuda.
In Grenada, under the former Keith Mitchell-led NNP regime, the island lost an estimated EC$54.2 million from the sale of passports linked to the failed Shrimp Farm project in Victoria.
The EU also forced these CBI passport sellers in the Eastern Caribbean to take measures to strengthen their vetting procedures, as well as to introduce mandatory biometric data collection and in-person attendance, and increasing minimum investment thresholds from the previous US$100,000 to at least US$200,000.
The EU is still not satisfied that enough has been done and has now resorted to its latest threat to the programme – bring it to a complete end by mid-2028 for the latest.
This is definitely a significant shift in the EU position on the selling of passports and the likes of PM Dickon Mitchell, NNP’s Emmalin Pierre and DPM’s Peter David cannot lock down their lips but must address the Grenadian people on the issue.
It was the NNP soon after its return to power after the 2013 general election who galloped to the sale of passports to cash in on much-needed revenue for the economy.