When Congress passed the Consolidated Appropriations Act of 2021, it extended the current EB-5 Regional Center Program through to June 30, 2021. But in an extraordinary move, it also decoupled the program from an automatic renewal in the next round of new spending. In other words, unless Congress passes a separate bill authorizing the continuation of the EB-5 program by the last day of June of this year, the program will cease to exist. On the other hand, if the program is in fact renewed, particularly with the integrity measures currently proposed, it could give the American economy and employment a significant boost at a time when investment and jobs are badly needed and at no cost to the American taxpayers.

A few years ago, Canada faced a similar situation regarding its federal investor immigration program. It may be instructive to consider what happened in Canada to see what we can learn from that experience. This could help us avoid some of the problems Canada had, and improve our approach in dealing with the current U.S. EB-5 challenge.

In an article recently published, Vince Lalonde, the current Director of Immigration at Pace Law Firm in Toronto (full disclosure – I also practice immigration law there), laid out the history of the Canadian investor program and what went wrong there. Lalonde pointed out that under the Canadian program foreign nationals with a net worth of at least $1.6 million could get permanent residence in Canada if they made a five year interest free loan of $800,000 to the federal government. But, as Lalonde laid out, the program proved unpopular with the Canadian public because the idea of “buying” permanent residence was unappealing to Canadians. Lalonde then singled out a few of the other salient reasons for the program’s demise:

1. Low contributions as taxpayers. Most investor immigrants did everything in their power to avoid becoming Canadian tax residents, and even those who did get stuck paying tax in Canada, often found ways to under report their worldwide income.

2. Low integration levels. Investor immigrants had the lowest official language ability of any immigrant category, including refugees. “Astronauts” — mainly from China — would move their families to Canada but continue to conduct their business abroad. That resulted in families who were never really fully committed to Canada and often returned to their country of origin after their children had taken advantage of the Canadian education system and other social services.

3. House price inflation. Investors were blamed for spiralling housing prices especially in BC’s lower mainland. Rich investors, often from China, developed a reputation for paying cash for multi-million dollar homes at sticker price, turning home ownership into a pipe dream for average Canadians.

4. Use of investment funds. Despite the fact that the investor immigrants paid millions of dollars under the Program, capital investment levels were disappointingly low.

5. Processing times. Investor applicants were frustrated by slow processing times and changing requirements. Applicants often waited six to eight years for their applications to be processed by the government, with no guarantee of success. The uncertainty meant it was next to impossible for these families to plan their future.

At least some of these criticisms could very well be made of the American EB-5 program. When the Canadian program was finally cancelled in February of 2014, an inventory of 65,000 individuals were waiting for their applications to be dealt with, which would have taken up to six years to process. When the government closed down the program, it chose to repay the applicants their money, eliminate the entire backlog and not process any of the pending applications despite the fact that some applicants had been waiting years for their applications to be approved.

The result of the program’s closure was that a class action lawsuit of individuals who had their backlogged applications dismissed was started. The plaintiffs sued the Canadian government to have their applications processed or, failing that, for monetary compensation. The primary goal of the suit was to compel Citizenship and Immigration Canada to deal with the outstanding applications before officially scrapping the program, but if the government was not willing to process the backlog, the complainants sought monetary compensation for each applicant in the suit and for each of the dependents named on their investor immigrant applications, which was estimated to surpass $ 16 billion.

Needless to say, cancelling Canada’s investor program was not popular with foreign investors, particularly among Chinese investors who made up the largest group. At a news conference 10 Chinese investor applicants delivered their crestfallen message — that their faith in Canada as a “trustworthy country,” with its attractive rule of law, environment and welfare system, was wavering. The cancellation of the program ultimately did indeed damage the reputation of the Canadian immigration program and to this day there is no federal investor program in Canada.

Eventually the class action law suit was settled when the Canadian government agreed to expedite the processing of many of the plaintiff investor immigrant’s applications to provide them permanent residence status plus pay their legal fees and costs. Some of the claims were rejected, however. While the lawyers involved came out of the ordeal with their fees paid most of the others involved were not happy to have gone through the exercise. Despite these previous hardships, however, Lalonde now argues that the time has come for Canada to re-introduce a new improved federal investor program.

In terms of what can be learned from this experience for the U.S. EB-5 program, several points come to mind:

1. Foreign investors currently backlogged in the U.S. system may be able to launch due process or promissory estoppel legal claims against the U.S. government and EB-5 regional centers if the program lapses. The process could be unpleasant and very costly. America’s overseas image as a great place to do business could be significantly tarnished. There is little benefit to letting the program expire.

2. There is a need for reform on the EB-5 program along the lines of the Grassley and Leahy bill that was put forward in Congress not long ago. Other improvements can be made in the years to come. Staying current and competitive with other countries is important in this area.

3. If we bear in mind that the EB5 program is responsible for less than one percent of the immigrant visas issued by the U.S. government each year, but is a major engine of growth for the U.S. economy, estimated to contribute over $ 9 billion in new investment and 300,000 in new jobs per annum in the years ahead, it makes sense to continue it.

4. Putting the argument the other way, a sober consideration of the hardships a failure to renew would cause, not only to foreign investors but more importantly to America’s economy and job markets, leads to the conclusion that renewing this program is vital to America’s future. It is inconceivable given the amounts of investment and the number of jobs this program has generated in the United States during its lifetime that Congress would now allow it to expire.

Source: forbes.com
Published: 23 February 2021

Last week, the Commonwealth of Dominica’s Ministry of Education concluded a Professional Development Training programme for its teachers. Focusing on upskilling and maintaining the high standard of education, teachers underwent workshops in incorporating technology in the classroom and teaching English as a second language for its Haitian, Spanish and Chinese student population.

Despite the pandemic, education has remained high on the government’s list of priorities. In recent years, Dominica has invested up to $26 million in the education sector, contributing towards the repair of 15 schools damaged by Hurricane Maria and the Education Mentorship Programme which connected 169 students with mentors. Funds were derived directly from Dominica’s Citizenship by Investment (CBI) Programme, an initiative that promotes second citizenship to wealthy foreigners once making an investment in either a government fund or buying pre-approved real estate.

Established in 1993, Dominica’s CBI Programme is considered the world’s best route to second citizenship and has been ranked as the top Programme by the Financial Times’ PWM for the last four consecutive years. Those who become citizens of Dominica through this route gain access to a long-list of visa-free destinations that is only anticipated to grow, including major education and business hubs across the globe. Additionally, benefits include alternative business prospects and a second home for you and your family.

Economic citizens also gain access to higher quality education both in Dominica and abroad. The small island recently opened a state-of-the-art veterinary school which is listed by the American Veterinary Medical Association and offers students the chance to do a third of their training in either Canada, the US or the UK. Similarly, the Caribbean is home to many other well-respected medical schools with links to the United States.

“Our literacy rate in Dominica is 96%. Every child in Dominica has access to primary, secondary and tertiary education. We have 100% access to these layers of education in our country. Education in Dominica is free to all our citizens,” Prime Minister Roosevelt Skerrit has highlighted in a recent webinar.

Alternatively, Dominica has sponsored students who wish to study abroad, particularly in countries like Canada, the United Kingdom and the United States. Due to Dominica’s status in the Commonwealth, citizens also stand to benefit from options exclusive to those from the 54 member states.

Source: prnewswire.co.uk
Published: 24 February 2021

Flying below the radar, given the recent upheaval within the Italian government, is the small but significant steps taken to improve Italy’s migration policies.

Late last year, the Italian Senate finally amended the so-called Immigration and Security Decree – signed by the far-right former interior minister Matteo Salvini in 2018 – that eroded protections for asylum seekers and unleashed serious legal repercussions for those who assist them.

That said, while some positive reforms have been introduced, it still falls far short of what is needed for a fair and humane migration policy.

Nevertheless, the new legislation could herald the beginning of a slow fightback against ‘Fortress Europe’ and can be a useful springboard from which to advocate for wider change across the bloc.

The first constructive step is the reintroduction of special protection permits for people with close family links and an established life in Italy, people with serious mental or physical health issues and those that do not qualify for asylum but would face risk degrading treatment if returned.

This will be a relief to the potentially hundreds of thousands of people thrown into irregular status after Salvini abolished the permits in 2018.

Elsewhere however adjustments are far too minor; the time required for citizenship application submissions has been reduced from from four years to three, which is still far too long.

Asylum seekers will once again have access to Italy’s reception and integration system run by municipalities and NGOs. It was previously limited to recognised refugees and unaccompanied children, leaving asylum seekers ‘warehoused’ in large interior ministry-run centres.

Widening integration programmes is crucial for all migrants and refugees across Europe and it is a welcome development that the soon-to-be introduced protection permits can be converted to longer-term work visas.

Under Salvini’s reign, NGOs rescuing migrants adrift in the Mediterranean were routinely harassed by the authorities, prevented from disembarking and threatened with fines of up to €1m.

Significantly reduced, these financial penalties still remain though can now be avoided if NGOs cooperate with “maritime authorities coordinating search-and-rescue operations.”

While this may sound reasonable, one of the countries that Italy and other EU members deem to be a competent maritime rescue coordination centre is Libya – a country where migrants are routinely enslaved and abused.

In the first mission of 2021, OpenArms SeaRescue noted that 160 people were taken back by the Libyan coastguard.

On a hopeful note, Salvini is currently standing trial for kidnapping after two high-profile incidents where migrants were detained at sea for weeks as a result of his closure of the ports to NGOs.

Message for Malta and Greece

If the courts find against him, this could send a powerful message to other EU member states such as Malta and Greece who have similarly impeded the work of search and rescue organisations.

Aspects of the new decree are promising, though much is simply rolling back egregiously punitive measures undertaken by a particularly reactionary interior minister.

In the meantime, refugee and migrant advocates should highlight the improvements and push for them to go further.

The finer details of the EU Migration and Asylum Pact of September 2020 are still being debated but it still indicates that the European Commission is kowtowing to hostile member states like Hungary and Poland by continuing to emphasise border security over dignity and human rights.

An approach to migration that has always characterised Europe and its member states, and which burdens people: what is happening in Bosnia is a catastrophic example.

The discourse around migration is too often presented as a ‘crisis’ that needs urgent solutions, rather than a phenomenon that can be sensibly and humanely managed.

The Covid-19 pandemic will only worsen the economic and security situation in some of the world’s most fragile states and prompt further displacement, making it all more vital that receiving countries like Italy develop a widespread reception system involving local communities that emphasises inclusion and self-determination.

Source: euobserver.com
Published: 16 February 2021

Today’s release of Q4 figures from the UK Office of National Statistics confirms what we predicted last week: The Tier 1 investor program’s approval volumes recorded a 40% year-on-year drop in 2020.

Only 52 main applicants, and 98 dependents, obtained investor visas in the UK during the October-November-December 2020 period. That represents a fall of nearly half compared to Q3.

For the year as a whole, the Home Office approved 216 main applicants, down from 360 in 2019. Presuming average investments of GBP 2 million per main applicant, the UK will have raised FDI worth GBP 432 million from the program during the year, although the true figure is likey 15-20% higher, as some applicants opt for the more expensive fast-track routes.

The largest source of investors in Q4 was Hong Kong, which contributed 10 of the 52 main applicants, followed by China (9), the United States (6), and Russia (5).

Rejection rates were also up considerably in 2020; 9% of applicants were turned away, compared to 4% in 2019.

The reduction in approvals is not limited to the Tier 1 investor category, explains Farzin Yazdi, Head of Investor Visa at London’s Shard Capital.

While investor visa issuances fell by 40%, “among all categories in the UK, there were just under one million visas granted in 2020, 69% fewer than the previous year,” he pointed out. Considering the harsh restrictions imposed on individuals and business in the UK during the last quarter of 2020 and the first quarter of 2021, Yazdi indicated that today’s low numbers are par for the course and that he expects a strong recovery.

“The decline,” remarked Yazdi, “is wholly expected and should surprise nobody. What’s more interesting at this stage is the road ahead through 2021.”

He highlighted the UK’s rapid vaccine rollout, the fastest among large countries, and said it would “resonate” with foreign investors. He also believes the now-completed departure from the European Union will work in the program’s favor.

“It’s now no longer possible to reside in the UK through EU treaty rights by acquiring an EU country’s citizenship, likely driving increased volumes of visa applications.”

A common theme in discussions of how the pandemic will change the investment migration market has been healthcare. Yazdi commented that he had observed concerns around healthcare and work practices take on a more salient role in the panoply of factors that motivate investors, but that conventional pull-factors remained at the forefront.

“The main motivation among Tier 1 (Investor) visa applicants is likely to still be education. As schools and, particularly, universities open up, we expect this to drive high volumes of demand among applicants. In short, despite a difficult 12 months, the UK continues to represent an attractive destination for migrants and we expect a significant bounce back in visa issuances as the year progresses.”

Source: imidaily.com
Published: 25 February 2021

In some circles 2020 became the year of the second passport.

For a cool THB 10 million (about $334,000), Thailand is doling out residency to investors willing to build residential real estate. St. Kitts and Nevis slashed the cost of its golden visa by $45,000 — a special COVID-19 discount — as if its Caribbean rainforests and beaches weren’t attractive enough for a second home. Russia, a latecomer to the golden visa world, reportedly will soon open to investors looking for a second home. Applicants must prove they are genuine: A language test may be involved.

High-net-worth individuals are a special currency in these pandemic times, and some are looking to be courted. Golden visa schemes have long flourished in times of economic stress (for example, the 2008 financial crisis), but they’ve taken on a special significance in the era of COVID-19. Potential tax savings aside, the allure for investors living in countries that have weak passports and are subject to visa approvals is strong and will continue to be, even after general travel restrictions are lifted.

Governments know this, causing some unlikely places to try to cash in on the golden visa market. Dominica is famous in the Caribbean for being the “Nature Isle,” an eco-tourism haven with large stretches of untouched land. That didn’t stop the country from unveiling a new entrepreneur visa program at the end of 2020 offering a pathway to citizenship for a minimum $50,000 investment, a relative steal. It may seem unusual for a country that is heralded for being a nature preserve. But one of the real draws is likely the access to the broader world — a Dominican passport offers visa-free travel to 140 countries and the EU Schengen Area. Also, Dominica does not impose a wealth or inheritance tax.

In a year of considerable hardship, 2020 cast a spotlight on the mobile capital of the rich, the efforts to court that money, and the inevitable backlash. For a more micro look at this, the EU provides a perfect example with the European Commission litigating against golden passport programs offered by Cyprus and Malta.

Above all, these activities highlight the tension governments face in trying to boost investment and attract capital in an uncertain time in which they also must take actions that may drive investment and capital away. In 2021 these dynamics aren’t necessarily going to quickly disappear despite the availability of coronavirus vaccines. Repair and recovery during the next COVID-19 pandemic phase could highlight this push and pull even more depending on how governments respond.

Looking to the Rich?

Amid the chaos of the pandemic, San Francisco quietly introduced a pay gap tax targeting companies with CEO pay rates at least 100 times that of their median worker’s salary. City officials thought the measure would be a good solution to reduce economic inequality and fund healthcare. Voters seemingly liked the revenue estimates they received: between $60 million and $140 million annually. They approved the measure in November 2020.

But the San Francisco tax has been trotted out as an example of what’s wrong with California — high taxes that are prompting several tech companies, like HP and Oracle, to move their headquarters to Texas. Alongside them, high-net-worth individuals are threatening to leave as lawmakers introduce wealth tax proposals. Pre-pandemic, discussions about raising taxes on the wealthy, and about wealth taxes in particular, tended to be rebutted with one popular argument: Raising taxes on the wealthy is best done during wars, pandemics, and major economic crises. Now that we are in the middle of a pandemic, the general question is whether this is, in fact, the right time.

Argentina has responded to the pandemic with a new solidarity tax on wealthy taxpayers, to be assessed on their domestic and foreign assets. The one-time measure will hit Argentines with at least ARS 200 million (about $2.4 million) in assets with a graduated tax, starting at 2 percent and maxing out at 3.5 percent for domestic assets worth over ARS 3 billion. Assets held abroad will be taxed from 3 to 5.25 percent.

Net-wealth taxation has become a central presidential campaign platform in some Latin American countries. Bolivian President Luis Arce rode to victory in October 2020 on a campaign that focused on taxing the wealthy. He is planning to implement a wealth tax on those with more than BOB 30 million (about $4.3 million). Finance Minister Marcelo Montenegro says it could potentially net over $14 million dollars, according to Telesur.

Ecuador’s election in February is hinging on the economy and anti-corruption reforms. Presidential candidate Andrés Arauz, who is a top contender, is campaigning on a wealth taxation platform. Arauz envisions an initial one-time 2 percent tax on assets exceeding $1 million, but eventually wants to implement a permanent wealth tax, according to the Financial Times.

In Europe, Spain already has a wealth tax, and decided to raise the top rate on taxpayers with assets over €10.7 million from 2.5 percent to 3.5 percent. The decision stands out on a continent that has cycled through wealth taxes, with only a small handful still standing. But it could also wind up being more symbolism than action. Spain’s national government determines the wealth tax rate, but it can be made moot by the country’s autonomous communities, which administer the tax but can offset it through credits. Madrid is the only region that does this — it credits 100 percent of wealth tax payments — but it is one of the country’s most powerful regions. Finance Minister María Jesús Montero has already suggested that the government set limits on wealth tax rates.

The country is also increasing individual tax rates. Taxpayers earning over €300,000 will see an increase from 45 percent to 47 percent. Spain is anticipating it will collect €580 million in 2022.

In the United Kingdom, Prime Minister Boris Johnson has flat-out said that wealth taxation is not an option. “We need jobs, jobs, jobs not tax, tax, tax,” he told reporters last summer. Chancellor of the Exchequer Rishi Sunak has spoken similarly. But that hasn’t stopped the topic from dominating the headlines and academic circles alike — especially since an independent group of U.K. academics released a widely circulated wealth tax report in December 2020 suggesting that the U.K. government enact a one-off tax. According to their calculations, a 5 percent tax on assets over £500,000 could raise roughly £260 billion over the next five years. Meanwhile, Sunak has hinted in interviews that the government is thinking about tax increases.

Kenya doesn’t have a wealth tax yet, but the government is revisiting the idea because this time around it might actually work. In 2018 the government tried to increase taxes on wealthier taxpayers, but the idea was vastly unpopular. This time the government is folding taxation of high-net-worth individuals into its post-COVID-19 economic recovery plan, although details have yet to be released. A similar story is playing out in South Africa, which explored wealth taxation in 2017 but ultimately shelved it. But the country’s national treasury is now reportedly thinking about folding a wealth tax proposal into the country’s upcoming national budget, to be released in February.

Courting the Boomerang

As some governments consider raising taxes on the wealthy, others are moving in a different direction, trying to attract wealthy individuals via golden visa opportunities. But not all is golden in this world. In October 2020 the European Commission opened infringement procedures against Cyprus — which has since suspended its golden visa program — and Malta, alleging that both countries were offering citizenship without requiring a genuine link to their countries. The pandemic reportedly caused Greece’s golden visa application numbers to crater over 2020.

But there’s seemingly ample space in the market. As the EU cracks down on golden visa programs and investors search for cheaper options, some countries are seizing the opportunity. Meanwhile, anecdotal reports from citizenship advisory firms indicate that inquiries are climbing worldwide.

London-based Henley & Partners says it has seen a 25 percent increase in inquiries from high-net-worth individuals asking about residence-by-investment programs. Most of these people are coming from emerging markets, as has traditionally been the case. India, Pakistan, Nigeria, and South Africa filled out four of Henley’s top five countries for 2020.

Between November 2019 and November 2020, inquiries from India and Kenya as a percentage of the firm’s total climbed into the double digits — 61 percent and 30 percent, respectively. Henley opened a new India office in the middle of the pandemic to handle the demand. The number of inquiries from Kenya jumped 116 percent over the period, according to the firm.

But investors from developed countries are interested too. The United States shot up to second place on Henley’s 2020 list following a 235 percent increase in inquiries. In 2019 the country was in sixth place. Canada saw a similar dynamic, climbing from 16th place to eighth place, according to the firm.

Financial advisory firm deVere Group says it saw inquiries grow by 50 percent from similar countries, as well as Russia and countries in the Middle East and East Asia.

What does this surge tell consultants? Henley and deVere both say it indicates that second passports have become more of a practicality for investors than an optional luxury item.

“Whether it be for personal reasons, such as to remain with loved ones overseas or be able to visit them, or for business reasons, a growing number of people are seeking ways to secure their freedom of movement as they have faced travel restrictions which are, typically, based on citizenship,” Nigel Green, deVere CEO said in December 2020.

Meanwhile, some countries have seized on the COVID-19 pandemic as an opportunity to introduce or relaunch golden visa programs and rules. The United Arab Emirates in November 2020 announced a new 10-year golden visa for professionals in lucrative fields like medicine, biotechnology and electrical engineering, and artificial intelligence. It also loosened its foreign business ownership rules. Up until December 2020, foreign nationals could not own a UAE business without having a citizen sponsor. But recent legislation now allows 100 percent foreign ownership of UAE businesses in most cases. One would be remiss to ignore the potential tax savings involved considering the UAE federal government does not impose a federal income tax or a general corporate tax. The ultimate benefit is that foreign-owned businesses registered in the UAE and foreign residents are eligible for UAE tax treatment once they obtain a tax residency or tax domicile certificate.

Russia’s proposed golden visa program will offer at least two avenues for permanent residency: invest RUB 10 million (about $135,000) and hire at least 10 Russian workers or buy at least RUB 30 million in property or government bonds, according to local reports. The government is hoping to court investors from Africa, Asia, and the Middle East, and the tax savings could be substantial. Russia imposes a 15 percent personal income tax on worldwide earnings, compared with a top rate of 24 percent in Nigeria, 30 percent in India, and 45 percent in South Africa.

Affording Tax Incentives

Investment certainty is a huge part of the equation for global elites, and those concerns have been amplified by COVID-19. At the beginning of the pandemic, governments rushed to implement tax incentives, freezes, and other measures to boost personal and corporate liquidity. The costs to government coffers are still unfolding, but a question to ask in 2021 is whether governments can still afford this. Or will we see a rollback of incentives, COVID-19-related or otherwise, to deal with potential budget crises? Some of this activity is already appearing in Jamaica and Kenya.

After several decades of very little economic growth, in 2020 Jamaica launched an ambitious economic stimulus plan, including an JMD 18 billion (about $125 million) tax cut package slashing both corporate and individual income taxes. Some measures, like a reduction in the general consumption tax rate, were designed to boost tax compliance. Others, like a reduction in the country’s assets tax on financial institutions, were designed to reduce burdens on business.

Over the past few years, Jamaica has gradually revised its assets tax regime — which was widely regarded as distortionary — to reduce burdens on business. Initially, the country imposed two types of assets tax: a 0.25 percent tax on the “taxable value” of assets held by government-regulated deposit-taking institutions, securities dealers, life insurance companies, and property and casualty insurance companies; and a flat, sliding-scale tax from JMD 5,000 to JMD 200,000 (based on the value of their assets) on nonfinancial institutions.

Jamaica repealed the assets tax for nonfinancial institutions in 2019 to reduce costs for micro and small businesses and better align taxation with profitability, according to the Ministry of Finance. In 2020 the ministry followed up with a proposal to halve the country’s assets tax on financial institutions from 0.25 percent to 0.125 percent, effective from 2021.

But once COVID-19 hit, Jamaica had to walk back some of its plans and decided to keep the 0.25 percent rate for another year to fund its COVID-19 recovery. Minister of Finance and the Public Service Nigel Clarke has acknowledged that the assets tax ultimately is a tax on consumers and is “not good for monetary transmission.” But the money involved was too large to pass up. Retaining the current rate increases the country’s COVID-19 fiscal contingency fund from JMD 7 billion to JMD 10 billion.

The Ministry of Finance said the banking sector volunteered to pass up the reduction, but behind that there’s been considerable dissent and concern over how Jamaican institutions can remain competitive in light of the tax.

Kenyan lawmakers addressed their sustainability issues by voting in December 2020 to undo nearly all their COVID-19-related tax cuts because they believe the country cannot afford them.

In April 2020 Kenya temporarily cut both its corporate and highest individual income tax rate from 30 percent to 25 percent and cut its VAT rate from 16 percent to 14 percent under the Tax Law (Amendment) Act, 2020. But the old rates kicked back into effect on January 1, after the Kenyan Parliament voted to reverse the cuts.

The only COVID-19-related tax cut that remains is a full exemption from pay-as-you-earn tax for individuals making less than KES 24,000 (about $218) per month.

The government estimates that cuts will ultimately cost Kenya KES 65 billion in revenue through December 31, 2020. Those losses will affect the country’s general economic recovery as well as progress on its top four priority programs — universal healthcare, affordable housing, manufacturing, and food security — according to the national treasury.

Before the pandemic hit, Kenya was already struggling with considerable levels of debt. It is on track to reach 70 percent of GDP by 2023, according to the IMF. In this environment, eliminating tax cuts was more or less unavoidable, according to Musalia Mudavadi, leader of Kenya’s Amani National Congress party.

These abrupt changes could put considerable strain on businesses in such an unprecedented time and sink taxpayer confidence. For example, Aly-Khan Satchu, a Nairobi-based investment adviser, told Reuters that the Kenyan government is “deploying knee jerk responses.” Given that sentiment, it’s not a tremendous leap to consider investment alternatives, particularly if governments are doing the courting.

Source: forbes.com
Published: 12 February 2021

President Joe Biden’s proposed immigration overhaul was introduced in Congress on Thursday, kicking off what will likely be one of his most difficult legislative challenges.

The legislation, known as the U.S. Citizenship Act of 2021, hews closely to the outline that Biden sent to Congress on his first day in office. The proposal includes an eight-year path to citizenship for most of the roughly 11 million immigrants living illegally in the U.S., bolsters the nation’s refugee and asylum systems and calls for additional technology to be used to help secure the southern border.

The citizenship path is not conditional on the implementation of border security measures, which had been a trade-off included in past immigration bills designed to earn Republican support.

Representative Linda Sánchez, a California Democrat, sponsored the bill in the House and New Jersey Democrat Bob Menendez is its chief sponsor in the Senate.

Previous attempts to reform the nation’s immigration system have failed over the past two decades, and Biden’s bill could face an even more daunting path because GOP lawmakers’ opposition to legalizing undocumented immigrants, which they decry as amnesty, hardened during the Trump era.

The White House previously signaled it is open to breaking the package into pieces and presenting them separately in order to win over at least some Republicans. Biden said in a CNN town hall event on Tuesday that smaller measures could help fix the system “in the meantime.”

Yet his team plans to defer to leaders in the House and Senate on the best path forward, including whether to try to use a procedural maneuver known as budget reconciliation to pass it with only Democratic votes while building support for broader legislation. The Democrats are employing the reconciliation process to pass Biden’s $1.9 trillion coronavirus relief plan.

Menendez said Thursday during a virtual press conference that it’s time to go big on an immigration overhaul after calling former President Donald Trump’s immigration policies “a cornerstone of Trump’s hateful horror show.”

“It’s time to bring all 11 million undocumented out of the shadows,” he said, calling them essential workers who should not be left behind by piecemeal efforts. “We are not going to make concessions out of the gate. We are not going to start with 2 million.”

Menendez said lawmakers won’t know if they can get 60 votes in the Senate until they try, which would be necessary to vote on the bill without using the reconciliation process.

“We will never win an argument we don’t have the courage to make,” he said.

Menendez said some Republicans want portions of the package — like provisions for farm workers or tech workers — but he made clear he wants a broad path to citizenship in return. It’s possible portions of the package could eventually move separately, including in a second budget reconciliation bill Democrats are planning on later this year, which would not need Republican votes, the senator said.

Menendez said there is a strong argument to be made that some provisions should be eligible because immigration has substantial budget impacts. Senate rules restrict what kinds of provisions can be included in a bill moving through reconciliation.

“We are not foreclosing any pathway,” Menendez said.

Several other bills could serve as vehicles to move parts of the Biden plan.

A bipartisan group of lawmakers has reintroduced the Dream Act, which would offer deportation protections and a citizenship path to immigrants, known as Dreamers, who were brought illegally to the U.S. as children. Democrats have also supported legislation that would offer immediate relief to farmworkers.

Biden’s proposal makes Dreamers, farmworkers and migrants with Temporary Protected Status eligible to apply for permanent legal residence right away, which would allow them to apply for citizenship within three years. That faster path to citizenship is meant to signal that those groups are important, but it doesn’t mean the White House has decided to pursue piecemeal bills to protect them, an administration official said on Wednesday.

Only immigrants who were in the country on or before Jan. 1, 2021 would be eligible for the legalization process.

Representative Joaquin Castro of Texas is also introducing a bill that would offer permanent legal status to about 5 million undocumented immigrants who have worked in front-line jobs during the coronavirus pandemic, as well as so-called Dreamers and those with Temporary Protected Status.

The Menendez-Sánchez bill would expand legal immigration for those seeking employment- and family-based visas by clearing backlogs of those waiting for green cards, lifting per-country visa caps, and exempting spouses and minor children from annual green card quotas. It includes a pilot program that creates 10,000 new visas for workers to help spur economic development in certain parts of the country.

It also contains provisions designed to please labor unions, which have in the past complained that certain visa programs allow companies to employ lower-paid migrant workers instead of American citizens. The bill would tie green card levels to macroeconomic conditions and establish a commission on workplace conditions comprised of union officials, civil rights advocates and others, administration officials said.

Biden has already signed a number of executive actions intended to roll back Trump’s hard-line immigration policies, including reversing a travel ban on some predominately Muslim nations, allowing certain asylum seekers to start entering the U.S. while their cases are being processed and beginning the process of winding down Trump’s “public charge” rule, which sought to deny green cards to immigrants who used Medicaid, food stamps, housing vouchers or other forms of government assistance.

The president also ordered construction halted on Trump’s wall at the Mexican border. Biden’s proclamation rescinded the national emergency that Trump declared to secure funding for the project.

The current administration is facing pressure from business groups to end Trump’s bans on most work visas, which the former president put in place shortly after the pandemic hit the U.S. The White House has put the visa bans under review but has yet to revoke them.

Source: bloomberg.com
Published: 18 February 2021

Crossing Borders 2021 Calendar

IMC Streaming presents the Crossing Borders 2021 Calendar

The popular Crossing Borders programme is back!

Get ready for a series of informative, interesting and interactive sessions, which will bring stakeholders together discussing current affairs and important issues of the day.

So sit tight, mark your calendars and make sure you do not miss out!

Date	Title
11th February 2021	The Rise of the Regional Citizen
24th March 2021	Common Reporting Standard and Mandatory Disclosure Rules within Investment Migration
30th March 2021	Win Win Pathways to sustainable development.
14th April 2021	Malta: The introduction of new Investment Migration Pathways Leading to Residence and Citizenship.
12th May 2021	Investment Migration FROM USA: A Huge Market Waiting to be Explored?
30 June 2021	Updates from Around the Globe with IMC Corporate Members.
14 July 2021	Insurance in Investment Migration: The Importance of Experienced Insurance Partners.
11th August 2021	Don’t Be the Last to Know: The Importance of Monitoring.
15th September 2021	Investing in a Global Britain Post BREXIT
13th October 2021	Portugal: the most popular golden visa program in the EU?
10th November 2021	Corruption is the Real Risk and Conducting in-country checks in a Covid-19 world
24th November 2021	Middle East Region and the demand for Investment Migration
9th December 2021	From Response to Recovery: Antigua and Barbuda Prepares its Post-Pandemic Economy

Click here to view the latest updates on this year’s Crossing Borders schedule.

To view recordings of past IMC Streaming broadcasts, please visit here

Jho Low, wanted in connection with $4.5bn theft, tried to buy off-the-shelf citizenship from Cyprus, report states

A Malaysian fugitive wanted in connection with one of the biggest frauds in history attempted to buy a “golden passport” that would have granted him unrestricted access to the EU, according to a report.

Jho Low, who is sought by law enforcement for his alleged role in the theft of more than $4.5bn (£3.3bn) from the government and people of Malaysia, sought the help of a passport brokerage called Henley & Partners to help him buy off-the-shelf citizenship from Cyprus, the report states.

The country is one of several EU countries that engages in “citizenship-by-investment”, whereby wealthy individuals can invest in property or government bonds in exchange for visas or passports. The practice is highly controversial, in part because a passport from one EU member state in effect grants the bearer unrestricted access to all others.

The schemes have also proven to be attractive to high-risk individuals, such as money launderers or corrupt politicians from countries where the rule of law is weak.

The joint report by the Organised Crime and Corruption Reporting Project and Sarawak Report, a Malaysian investigative journalism outlet, states that Low signed a contract with Henley & Partners in 2015 for help acquiring Cypriot citizenship.

Henley & Partners has previously denied any relationship with Low. A spokesperson told reporters the company declined Low as a client because he failed to pass its internal due diligence checks.

Instead, however, it referred him to a third agency. Invoices seen by the reporters show Henley & Partners issuing invoices to other Cypriot companies for work relating to Low’s application for a golden passport.

They also obtained leaked emails that appear to show the head of Henley’s Cypriot office corresponding directly with Low and detailing the steps necessary to help him invest in a property as part of his golden passport application. The company directed Low to transfer €6m (£5.3m) to an escrow account to cover the cost of the property, according to the report.

However, in November 2016 – five months after the US Department of Justice had publicly identified him as a conspirator in the 1MDB fraud – Low reportedly sought Henley & Partners’ help acquiring an alternative, larger property.

A spokesperson for Henley & Partners told the reporters that “we remain entirely certain that the firm did nothing wrong”, but conceded that “it may be that some individual staff members involved at the time did not act as one team, or failed to adhere to the new procedures or did not exercise a sufficient level of judgment as to their interaction with real estate partners”.

Low, who has been widely reported to be in China, has previously denied any wrongdoing. However, the disclosure of further details of his attempt to procure a Cypriot golden passport will place the scandal-ridden scheme under further scrutiny.

Last year the country announced a suspension of the programme after undercover journalists at Al Jazeera filmed Cypriot lawmakers agreeing to help a fictitious Chinese criminal procure access to the country.

In 2017 the Guardian reported on a leaked list of programme applicants including various Russian and Ukrainian oligarchs, as well as a Syrian businessman placed under sanctions by the US for corruption.

In October last year, the European commission launched legal action against both Cyprus and Malta, which runs its own golden passport scheme, over concerns that the programmes were devaluing the concept of EU citizenship by awarding passports to individuals without a genuine link to either country.

Paddy Blewer, the group head of communications for Henley & Partners, reiterated in a statement to the Guardian that Low was referred to a third party and not accepted as a direct client.

“The group executive committee of Henley & Partners has long since recognised that the firm should not benefit in any way from any individual who has been rejected, for any reason,” he said.

He said new safeguards had since been adopted to prevent similar situations occurring, and that staff and executives involved in the transaction had since left the firm.

Source: theguardian.com
Published: 3 February 2021

Global-Migrate accused of promoting access to travel document without the government’s authority, although advertisements ‘not unlawful in themselves’

An international migration firm is being investigated for allegedly promoting access to the Vanuatu’s passports without the government’s authority, in the latest controversy to hit the country’s “citizenship-for-sale” program.

Vanuatu’s citizenship commissioner, Ronald Warsal, has placed Global-Migrate under investigation after access to the scheme was promoted by its Dubai office on the company’s website, and videos and pictures appeared on its Facebook page, showing apparently happy customers holding passports and even national ID cards.

Vanuatu runs citizenship-by-investment programs that allow foreign nationals to buy citizenship for US$130,000 for a single applicant, $80,000 of which goes directly to the government.

The programs have grown rapidly to become one of the Vanuatu government’s chief earners, as its budget bottom-line has been hurt by pandemic shutdowns. In the first six months of 2020, passport sales represented nearly half of Vanuatu’s total income.

But the programs have also attracted controversy, with reports of links to alleged cryptocurrency Ponzi schemes and citizenships being sold to people on Interpol wanted lists.

Income from the programs exceeded $115m in 2020, with more than 840 new citizenship applications granted. An average of 70 new applications were granted each month.

In a statement announcing the investigation in January, Warsal said the online advertisements by Global-Migrate of the government’s “development support programme” were “not unlawful in themselves”, but claimed they were a “distasteful representation of the program”. He said the company was not registered with the Vanuatu National Citizenship Commission or authorised to promote its citizenship program internationally.

“It is of vital importance that we retain our citizenship program for the benefit of Vanuatu … [the] commission has made it its priority to ensure that the program operational standards are raised, with better management and control.”

At the time of publication, Global-Migrate’s website was still promoting access to Vanuatu’s citizenship scheme online, saying “currently Vanuatu passport is the best option in the market due to its easy process, less documents requirement and quick processing time (60-90 days)”.

“The applicant does not need to travel to Vanuatu and there is no language test requirement. We guarantee the passport as long as you do not have any serious criminal convictions.”

Global-Migrate has not responded to questions from the Guardian sent to its Dubai, London and Sydney offices.

The company’s Facebook timeline features dozens of testimonial images, showing letters granting visas to Canada, the UK, Portugal, Australia and Poland. In numerous cases, personal data on published documentation is only partially obscured, with the identities of several applicants discernible and even a home address revealed.

The Guardian has not been able to ascertain whether those individuals whose personal data is displayed have consented to publication.

Eight Vanuatu passports were among the images shared on the company’s Facebook account. Seven of them appear to belong to a single family.

A video on the website shows the passports. One of them is held open briefly, exposing the face, name, age and swipe strip.

A certificate of citizenship is also visible in the frame, and although the names are obscured, a tracking number is clearly visible, showing that it was issued through Vanuatu’s development support programme in 2020. Metadata attached to the video file indicates it was created in February 2020.

“Today we would like to share with you that one of our customers received passports of Vanuatu for him and his family of seven. The passports are with us as you can see,” a spokesman on the video, speaking Arabic, says.

“Vanuatu passport is one of the best secondary passports and secondary nationalities, it allows you to travel to 129 countries including UK, Hong Kong, Russia, Singapore and Schengen countries and to Australia through E-Visa. It’s a very powerful passport and you can get it within 45 days, 60 days maximum, with us at Global-Migrate. Thank you and congratulations to our customer from Yemen for receiving Vanuatu for him and his family.”

Several Pacific states, including Tonga, the Marshall Islands and Samoa have run citizenship-by-investment programs as a way to inject foreign capital into narrowly based and fragile economies. Many have been beset by governance problems and illegitimate applications. Nauru’s program caused significant international concern after reports their passports had been sold to suspected members of al-Qaeda and other terrorist groups.

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Vanuatu’s passports are advertised as granting visa-free access to more than 120 countries, including the UK and EU nations, but the country is also promoted online for having no income, corporate or wealth tax.

Vanuatu has only recently completed a comprehensive finance sector reform intended to remove it from the OECD’s “gray list” of countries that are uncooperative or non-compliant in their measures to combat money laundering and financing of terrorism.

It has faced numerous challenges to keep its citizenship-by-investment programs running, including a 2017 investigation that found citizenship could be bought with bitcoin, and alleged links to a massive US Ponzi scheme.

And last year, four Chinese nationals had their Vanuatu citizenship summarily stripped when they were discovered to have been the subject of an Interpol red notice.

Despite these and other problems, the programs remain popular, and their revenues are becoming increasingly central to the country’s fiscal and financial health.

The country has two citizenship-by-investment programs: The development support program and the Vanuatu contribution programme. The development support program was instituted in 2016 and is open only to ni-Vanuatu agents who meet selection criteria. There are more than 90 existing agents.

Law firms, accountancies and professional services companies with decades of experience are listed, along with a construction company, a cleaning and catering firm, and what appears to be a fried chicken shop.

The majority of passports are sold in Hong Kong by PRG ImmiMart, sole provider for the separate Vanuatu contribution programme. It has not been implicated in any of the controversies surrounding Vanuatu’s citizenship programs.

Inside Vanuatu, monthly citizenship revenues continue to grow steadily, while tax revenues have fallen.

Mid-year finance data shows that tax revenues are lagging behind even the revised forecasts by roughly 6.2%. Citizenship revenues meanwhile have exceeded budget projections consistently since the programmes were instituted in 2016. For the first six months of 2020, citizenship-by-investment sales represented 49.4% of all government income, treasury figures show.

Since the beginning of 2018, Vanuatu’s citizenship-by-investment programs have generated more than $312m.

Source: theguardian.com
Published: 3 February 2021

Newly inaugurated President Joseph R. Biden wasted no time in his first days in office, launching a sweeping array of immigration-related executive orders, regulatory actions, and legislative proposals. Below is a summary:

Executive Orders

• “Proclamation on Ending Discriminatory Bans on Entry to the United States.” This order revokes a variety of Trump administration orders and proclamations that prevented certain individuals from the United States, such as those from primarily Muslim countries and largely African countries, from entering the United States. The new order states that these Trump administration orders and proclamations “are a stain on our national conscience and are inconsistent with our long history of welcoming people of all faiths and no faith at all.” The order says that such orders and proclamations also “have undermined our national security,” “jeopardized our global network of alliances and partnerships” and are a “moral blight that has dulled the power of our example the world over,” in addition to separating families and “inflicting pain that will ripple for years to come.” Among other things, the order also states that when visa applicants request “entry to the United States, we will apply a rigorous, individualized vetting system.” https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/proclamation-ending-discriminatory-bans-on-entry-to-the-united-states/
• “Preserving and Fortifying Deferred Action for Childhood Arrivals (DACA).” This order refers to DACA guidance issued in 2012 under the Obama administration that “deferred the removal of certain undocumented immigrants who were brought to the United States as children, have obeyed the law, and stayed in school or enlisted in the military.” The new order directs the Secretary of Homeland Security, in consultation with the Attorney General, to “take all actions he deems appropriate, consistent with applicable law, to preserve and fortify DACA.” https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/preserving-and-fortifying-deferred-action-for-childhood-arrivals-daca/
• “Reinstating Deferred Enforced Departure for Liberians.” This order defers through June 30, 2022, with some exclusions, “the removal of any Liberian national, or person without nationality who last habitually resided in Liberia, who is present in the United States and who was under a grant of DED [Deferred Enforced Departure] as of January 10, 2021.” The order also provides for employment authorization for such persons through June 30, 2022, and calls for a notice to be published in the Federal Register. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/reinstating-deferred-enforced-departure-for-liberians/
• “Proclamation on the Termination of Emergency With Respect to the Southern Border of the United States and Redirection of Funds Diverted to Border Wall Construction.” Among other things, this order calls for a pause on construction work and funding for the southern U.S. border wall and an assessment of related legal, administrative, and contractual issues. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/proclamation-termination-of-emergency-with-respect-to-southern-border-of-united-states-and-redirection-of-funds-diverted-to-border-wall-construction/
• “Executive Order on the Revision of Civil Immigration Enforcement Policies and Priorities.” This order revokes a Trump administration order issued January 25, 2017 (“Enhancing Public Safety in the Interior of the United States”) and states that the Biden administration will “reset the policies and practices for enforcing civil immigration laws to align enforcement” with certain values and priorities, including protecting national and border security, addressing the humanitarian challenges at the southern border, ensuring public health and safety, and adhering to “due process of law as we safeguard the dignity and well-being of all families and communities.” https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-the-revision-of-civil-immigration-enforcement-policies-and-priorities/

Regulatory Actions

• A memorandum to the heads of executive departments and agencies sent by Ronald Klain, President Biden’s chief of staff, states that President Biden is calling for a regulatory freeze pending review of any new or pending rules, with possible exceptions for emergency or urgent situations. The memo states that no rule should be proposed or issued “in any manner,” including by sending a rule to the Office of the Federal Register (OFR), “until a department or agency head appointed or designated by” President Biden reviews and approves the rule. President Biden ordered that rules that have been sent to the OFR but not published in the Federal Register to be immediately withdrawn. For rules that have been published or issued in any manner but have not yet taken effect, President Biden ordered department and agency heads to “consider postponing the rules’ effective dates for 60 days” so they can be reviewed. The memo also calls for the consideration of opening a 30-day comment period. The memo calls for the Office of Management and Budget director to implement the regulatory review. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/regulatory-freeze-pending-review/

Legislative Proposals

• President Biden will soon send a proposed immigration reform bill to Congress. According to a fact sheet issued by the White House, the legislation, called the “U.S. Citizenship Act of 2021,” would:
  • Provide worker protections and improvements to the employment verification process.
  • Clear employment-based visa backlogs, recapture unused visas, reduce lengthy wait times, and eliminate per-country visa caps.
  • Make it easier for graduates of U.S. universities with advanced STEM degrees to stay in the United States.
  • Create an earned roadmap to citizenship for undocumented individuals, allowing undocumented persons to apply for temporary legal status and apply for a green card after five years if they pass criminal and national security background checks and pay their taxes. DACA “Dreamers,” temporary protected status beneficiaries, and immigrant farmworkers who meet specific requirements would be eligible for green cards immediately. After three years, all green card holders who pass additional checks and demonstrate knowledge of English and U.S. civics could apply for U.S. citizenship. Applicants must be physically present in the United States on or before January 1, 2021. A waiver is included for certain family unity or other humanitarian purposes.
  • Reform family-based immigration.
  • Increase diversity visas from 55,000 to 80,000.
  • Promote immigrant and refugee integration and citizenship.
  • Prioritize border controls that include technology and infrastructure improvements.
  • Manage the border and provide various resources to protect border communities.
  • Crackdown on criminal organizations.
  • Address underlying regional causes of migration.
  • Reform immigration courts.
  • Support asylum seekers and other vulnerable populations.
  • Change the word “alien” to “noncitizen” in U.S. immigration laws.

It will be interesting to follow these myriad proposals and actions as they make their way through the agencies, the regulatory and legislative processes, and the courts. Some Republicans have already signaled their resistance to aspects of the legislative proposals. Sen. Lindsey Graham (R-SC), for example, said comprehensive immigration reform “is going to be a tough sell given this environment, but doing DACA, I think, is possible.” Stay tuned.

Details:

• “Fact Sheet: President Biden Sends Immigration Bill to Congress as Part of His Commitment to Modernize Our Immigration System,” Biden-Harris Transition Press Release, Jan. 20, 2021, https://cdn.vox-cdn.com/uploads/chorus_asset/file/22246670/Fact_Sheet__America_s_Citizenship_Act_of_2021.pdf
• “Senate Republicans Throw Cold Water on Biden’s Immigration Proposal,” https://www.nbcnews.com/politics/immigration/senate-republicans-throw-cold-water-biden-s-immigration-proposal-n1255232

Source: klaskolaw.com
Published: 1 February 2021