Monday 13 July, 2020

US State Department concerned about St Lucia’s CIP

The US State department issued its 2018 International Narcotics Control Strategy Report (INCSR) in which it expressed concern about St Lucia’s Citizenship by Investment Programme as well as concerns regarding money laundering.

On the CIP, the report says: “The government established a Citizenship by Investment Unit (CIU) to manage the screening and application process. The CIU does not maintain adequate autonomy from politicians to prevent political interference in its decisions. U.S. law enforcement also is increasingly concerned about the expansion of these programs due to the exposure to local corruption and the visa-free travel and ability to open bank accounts accorded these individuals.”

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They later recommend, “The government should ensure its CIP is adequately supervised and monitored to prevent its abuse by criminals.”

In February, CEO of CIP Nestor Alfred said that there is complete independence between the government and the CIP board and it is the board and not the government that makes decisions on the granting of citizenships.

He also said that the hallmark of the program is its due diligence process, which he said may be one of the most rigorous in the region.

The report addresses money laundering in St. Lucia  saying, “it primarily relates to drug trafficking. Illicit drug trafficking by organized crime rings and the laundering of drug proceeds by domestic and foreign criminal elements remain serious problems for St. Lucia. It is believed financial institutions unwittingly engage in currency transactions involving international narcotics trafficking proceeds. St. Lucia’s Financial Intelligence Authority (FIA), its FIU, detected these new trends: large cash deposits in accounts followed by immediate withdrawals; large euro currency cash conversions; inter-account transfers without any economic rationale between related accounts either controlled by an individual or through associates; and purchase of real estate with cash and then resale.

According to St. Lucia authorities, the narcotics trade is the main source of illicit funds. These illicit proceeds are usually laundered through structured deposits and currency exchanges in the financial system. Illicit proceeds also enter the financial system through some ostensibly legitimate business operations.

The INCSR “describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2017. It covers drug and chemical control activities as well as money laundering and financial crimes.

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