Exiger’s Karen Kelly believes investment migration programmes must seek partners, not mere service providers, to navigate the ever evolving due diligence landscape.
When Karen Kelly began her journey at IPSA International in 2008, the field of investment migration was on the brink of significant expansion. While IPSA initially had a broader focus, working for corporations of all sizes – from Fortune 100 companies to mid-sized and owner-managed businesses – across a broad range of industries including local, state and government agencies, it also started performing due diligence related to immigration, citizenship, and visas. As one of the industry pioneers, the firm also began collaborating with financial institutions working with applicants to investment migration programmes in Canada and the UK. “Looking back at that time, I can say that this early period marked the foundation for what would later become best practices in due diligence reports,” says Kelly. “Many of those fundamental elements that we developed remain in place, albeit with some subtle differences, while some aspects have expanded over time,” she adds.
Growing Together
Around the year 2011, IPSA started working directly with governments particularly in the Caribbean, and later in Europe. “Our work grew because the programmes took off, and throughout the years, due diligence evolved alongside the investment migration industry,” she says. In 2017, IPSA Canada was acquired by Exiger. “Then Exiger launched its Immigration, Citizenship & Visa (ICV) due diligence practice, and we continued with that focus on government programme due diligence,” Kelly explains.
Reflecting on the early days, Kelly acknowledges that over the years, many Citizenship by Investment (CBI) units have significantly enhanced their understanding and expertise in due diligence. Moreover, she says the level has been taken up another notch in recent months.
In many countries, CBI staff have undergone comprehensive training in anti-money laundering and countering terrorism financing. CBI units have been restructured on the advice of external compliance experts to ensure that all procedures are updated, and that rigorous quality control is strictly adhered to.
While Kelly acknowledges that part of this dedication to training and development came in response to international pressure, she also emphasises that critics often speak of due diligence as if nothing had been done before, “but that’s far from the truth.” When examining the Caribbean CBI programmes, she noted “a profound dedication” to due diligence. “This commitment starts at the leadership level, which is crucial within an organisation. They are motivating their staff to grasp due diligence and undergo training.”
Exiger has responded to this need, and a significant part of its work with CBI programmes today consists of training due diligence staff in government agencies. “We offer updates or refreshers to new staff, helping them build their internal capacity and grow their team. This approach ensures that everyone starts from a baseline level that is greatly improved over where it was 10 years ago, for sure, and even five years ago. So yes, the commitment to training and learning is evident,” she says.
A Close Relationship
Kelly says that the relationship between investment migration programmes and due diligence providers has significantly evolved over the years. Due diligence firms are no longer mere service providers. “There is a mutual understanding that this is a genuine partnership. It only works when both parties share a commitment to raising standards. The programmes depend on us to meet their requirements and they appreciate our transparency and honest advice. So, I believe that the term ‘partnership’ accurately describes our current dynamic.”
Kelly also emphasises that this partnership extends to addressing the challenges investment migration faces in the United States and the European Union. “Government units often find themselves in a position where they need to provide informal responses or describe the actions of their due diligence partners to other countries or international bodies. We have well-established methodologies and standards in place, and we are more than willing to share those details. This helps them effectively demonstrate the diligence of their partners.”
While due diligence companies like Exiger do not handle the entire due diligence process, with programmes also incorporating additional information gathered through domestic or international law enforcement and intelligence agencies, “we know we are an important part”, says Kelly. “We want to give them all the ammunition they need for a successful dialogue with these international parties,” she adds.
Tailored Training
Exiger leverages subject matter experts to provide training on a wide range of topics relevant to due diligence based on its clients’ requests. Introductory sessions for new employees cover the fundamentals of due diligence, including understanding its key components and recognizing potential red flags. Exiger also offers training specific to the cultural context of due diligence in various regions or countries.
“We help participants understand how certain factors may raise red flags in the Middle East, for example, but not necessarily in the US. This training underscores the significance of considering cultural factors and their impact on the interpretation of due diligence results,” Kelly explains. Training sessions also cover the availability of information, which can vary significantly from one country to another.
“For instance, the absence of findings about a failed business might be due to the fact that bankruptcy isn’t recognised there. However, most individuals wouldn’t be aware of these nuances. So, our subject matter experts focus on highlighting the distinctions between jurisdictions to enhance understanding,” she says.
Advanced Course
Exiger also offers a comprehensive four- day advanced training course, which serves as a unique forum for programme practitioners involved in reviewing applicant due diligence. CBI unit staff and officers engage in extensive discussions and mutual learning about due diligence.
“Participants can share their own experiences, focusing on general insights without disclosing confidential information. This collaborative environment allows attendees to learn from one another in terms of their approach to due diligence. Since not everyone approaches this process the same way, and different programmes have distinct procedures, this exchange of knowledge is invaluable,” says Kelly.
A significant part of this training involves case studies with hypothetical due diligence and applicant profile scenarios. Attendees of the course, grouped with colleagues from other programmes, then analyse the case. They discuss what they find most relevant, what questions they would ask to mitigate risk, and how they would summarise or present the risk to a decision maker.
“This exercise provides intriguing insights as attendees often have varying perspectives. It’s not because one person is taking it more seriously than another, but rather because different individuals have different preferences for the depth of questioning. Some may want to ask more questions, while others feel they have all the necessary information in front of them to make an assessment. This unique opportunity benefits the programmes we collaborate with, enabling their participants to bring this newfound knowledge and practical experience back to their teams to share and engage in meaningful discussions with their colleagues.”
Be More Critical
Despite the improved understanding of due diligence by CBI units, Kelly identifies areas for further enhancement. “In my experience, one of the questions that programs should pose more frequently, and I would appreciate being asked more, pertains to methodology. While due diligence providers may assert their ability to perform a service, it is crucial to request a comprehensive explanation of their methodology from inception to completion,” advises Kelly.
She highlights that, at times, buzzwords like “monitoring” are used without specifying the details. Consequently, she recommends that CBI staff pose specific questions related to scope, such as: What data, precisely, is monitored? What is the threshold for information to be reported? How frequently is it conducted? Is a quality assurance process in place? “These enquiries empower programmes to acquire a deeper understanding and refrain from merely accepting surface- level assurances,” she explains.
She emphasises that there’s no need to hesitate when asking such questions. A due diligence partner should seamlessly integrate into the CBI team, becoming an extension rather than a distant outsourced provider. “Reputable due diligence providers should readily engage in open discussions and willingly share their methodologies. In essence, this dialogue not only enables programmes to establish elevated standards but also motivates providers to align with and meet those standards,” she concludes.
