Henley & Partners acknowledges the recent publication of a report entitled ‘European Getaway’ by Transparency International and Global Witness (‘the report’) on the alleged security and other risks associated with investment migration programs in Europe.
We understand and share many of the fears and concerns that appear to have driven this work. However, these concerns are now either theoretical or represent a very small proportion of the investment migration reality, due to the robust action taken by Henley & Partners and the wider industry.
The authors admit to the “incomplete” nature of the report, which regrettably contains a great deal of oversight, inconsistency, and exaggeration. As we and many other stakeholders have repeatedly pointed out in relation to other misleading reports that have circulated from time to time, these shortcomings are not surprising given the inherently complex and pioneering nature of the investment migration industry; it is very hard to accurately assess the industry in a cursory way.
While we are able to acknowledge some of the threats that the report outlines, it is a shame that the authors appear to have fundamentally overlooked the industry’s robust response to these issues and have not consulted with the main firms or with the Investment Migration Council, which sets the standards on a global level and interacts with other professional associations, governments, and international organizations in relation to investment migration.
Henley & Partners and the other leading firms in the industry have, through the Investment Migration Council, and in combination with specialist due diligence providers and many of the sovereign states that run residence- and citizenship-by-investment programs, invested significant time and capital into creating very strong systemic approaches to risk management that match or even surpass those of other world-leading professional services providers and banks.
We wish to remind all interested parties that, while significant focus must be placed on the investor side of the industry, consideration must also be given to the sovereign side of the equation. Investment migration programs bring billions of euros’ worth of much-needed capital to sovereign states that would otherwise have to be raised through taxation or increased sovereign debt and budget deficits.
This capital enhances economic sovereignty and can be used to create true social value. Residence- and citizenship-by-investment programs also bring international skills and experience that help diversify local economies and create opportunity. This is particularly important in developing and post-colonial economies with constricted geographies and populations and limited industrial bases.
Henley & Partners wishes to provide necessary context and make the following clear:
Finally, we would like to draw attention to a recent comprehensive public policy paper published by the Investment Migration Council in partnership with Thomson Reuters on industry due diligence, of which the following excerpt (pages 75–76) is particularly illuminating in the context of the Transparency International report:
“When functioning appropriately, these programmes do not offer passports for sale; they attract investors with the added inducement of the prospect of citizenship, subject to the investor meeting very high standards of scrutiny. This is a way of attracting foreign direct investment with reduced risk for the investor. Ordinarily, a foreign investor relies entirely on the goodwill of the government of the country he has chosen to invest in. In the case of citizenship by investment, the foreign investor ceases to be a foreigner and can actually rely on the protection afforded to all citizens of his new country.
“On the other hand, the country receiving the investment increases its ability to raise employment levels, expand infrastructure and provide badly-needed social services without resorting to borrowing. Properly run, therefore, citizenship by investment programmes can be mutually beneficial for both the country and the investor.
“It is equally erroneous to state that by their very nature, these programmes pose an international security threat. Here the reader is reminded of the role that the Barbados-based Joint Regional Communications Centre plays in the vetting of applicants for citizenship under these programmes. The reader is further reminded that the JRCC is only one agency involved in the vetting process. Typically, there are additional players which perform a similar role. The reader is further reminded of the role played by the Financial Action Task Force.
“The end result of all this due diligence is that ‘perhaps 1% of the industry’s clients are human-rights violators, money-launderers or other fugitives from justice, and the other 99% mostly jet-setters or “doomsday preppers”’. That is the assessment of Peter Vincent, a lawyer and immigration and security expert who was appointed Director Counsellor for BORDERPOL in October 2015.”
To read more, see https://investmentmigration.org