PART I-THE CBI PROGRAM THAT FACILITATES MORE CORRUPTION AS AN INTERNATIONAL PONZI SCHEME THAN LEGITIMATE INVESTMENTS

In this short series of articles, we intend to give some consideration to the Citizenship by Investment (CBI) programme of Dominica. In particular, we shall examine the legislative mandate and the use of the non-transparent escrow account mechanism  as a legal arrangement to hide billions of dollars of revenue generated from the various options operated under the programme. The official website of the Citizenship by Investment Unit (CBIU) of Dominica lists two (2) recognized options under which an individual can obtain Dominican citizenship pursuant to the laws of Dominica.

  1. The Economic Diversification Fund (EDF)

This is a program of the Dominican government that was established through the Citizenship by Investment Programme, as one component of a national capital mobilization portfolio. Applicants can acquire economic citizenship to Dominica by making a financial contribution to its EDF. All monies generated from the EDF go towards improving projects in the public and private sector, which are in need of financial support. This includes building schools, health centers, hospital and the creation of a national sports stadium, as well as a variety of other undertakings across numerous industries such as tourism, information technology, and agriculture. Supposedly, all such funds are to record as part of the Consolidated Fund of the country as provided for  under Section 76 of our Constitution and Sections 13 and 14 of the Finance Administration Act of Dominica. They are NOT considered ‘Special Purpose Funds’ as confirmed by the former Financial Secretary, Ms. Rosmund Edwards.

To qualify for citizenship under the EDF option, various contribution amounts and fees such as processing fees, due diligence fees, and certificate of naturalization fees are required, depending on the number of dependents included in the application i.e. single applicant, main applicant and spouse, the main applicant and other qualifying dependents.  

 The EDF was established as one component of the CIP as a national capital mobilization portfolio, with the goal of national development. By the literal interpretation of the provisions of the S.R&O No. 43 of 2013 establishing the programme and by the operation of law, the EDF is meant to generate funds to be utilized for public and private sector projects, where a need is identified. Public sector projects identified for financing under the programme include, but are not limited to,the building of schools, hospitals, health centers, and for the construction of national sports stadiums, etc. With respect to private sector projects, governments normally focus on tourism, information technology, and agricultural projects. Housing for private individuals is not listed as a ‘development project’ under the programme

  1. Real Estate Investment Option:

The second know legal option under the Dominican CBI programme is the ‘Real Estate Option’, which involves the purchase of an interest in authorized property worth at least USD $200,000. A so-called ‘investor’ or purchaser of citizenship is obligated to hold this (investment) for at least three (3) years from the date that citizenship is granted after which, the so-called ‘investor’/passport buyer/new citizen is able to re-sell the real estate interest acquired after five (5) years. The said investor, therefore, is able to recoup his original investment and keep his citizenship, which ironically in most cases is the main motive of the CBI transaction.

In this bizarre CBI transaction, the main objective of the transaction is treated as a secondary by-product. In this instance, unlike the EDF Option, the so-called investor can only purchase interest in a ‘government approved project’ of which there are currently about eight (8) such projects including; (i) Anichi Resort & Spa, (ii) Bois Cotlette, (iii) Ay Ay Holdings Caribbean Ltd/Jungle Bay Ecovillas, (iv) Range Developments/Kimpinski Resort, (v)  the Residences at Secret Bay, (vi)  Sanctuary Rainforest Eco Resort and Spa, (vii) Sunstone Incorporated – Tranquility Beach Dominica, and (viii) Grande Anse Holdings – Timbo’s Downtown.

  1. Other Options- MMCE Housing

 One will note that the infamous Montreal Management Consultants Est (MMCE) Housing Option is NOT listed by the government as an “approved development project.” MMCE appears to be listed only as an authorized CBI Agent to engage in the EDF Option. However, according to Prime Minister Skerrit, MMCE Housing Option is now the leading revenue generator under an undisclosed CBI Option, which may be hidden three magic words in section 2 of S.R&O 37 of 2014 that we shall discuss in more detail in Part II of this series i.e. other approved project.’ This makes the CBI Real Estate Option ripe for judicial review and subject to deep scrutiny as it stinks like a multi-billion dollar criminal Ponzi scheme.

In addition to the capital required for the Real Estate investment, the following fees are also applicable, which are collected by the government of Dominica i.e., processing fees, due diligence fees, certificate of naturalization fee and where appropriate expedited passport issuance fee.

The legal instruments establishing and guiding the CBI programme of Dominica does not appear to make an explicit mention of the notorious “Housing Option”, which appears to be exclusively managed and promoted through MMCE, a Government-authorized Citizenship Firm, described as a dynamic firm that provides the most outstanding and exceptional professional services for application for Economic Citizenship to a number of countries.

MMCE was founded by Anthony Haiden, which is its Chief Executive Officer. The company has been operating in the Economic Citizenship consultancy industry for a number of years. Officially, the company was incorporated in the UAE in April 1999. MMCE specializes in immigration services in Canada and the USA as well as Citizenship by Investment (CBI) for the following countries Saint Kitts & Nevis, Dominica, Cyprus, Antigua and Barbuda, Grenada, and Malta. This qualifies MMCE as a leader in global citizenship by investment and residency. MMCE is not only a leading firm internationally but also the biggest in the immigration field based on the number of applications submitted to various jurisdictions. MMCE has a subsidiary, ‘MMCE-Development and General Services Ltd’, which facilitates the direct construction of projects in Dominica and indirectly via partnerships in St. Kitts and Nevis.

MMCE Ltd has been appointed by the Government of Dominica to represent and promote its Citizenship by Investment Program across the globe. According to the company itself on its website,

            “Under current regulations, to qualify for citizenship of the Commonwealth of Dominica under its Citizenship by Investment Program, the Government requires either (i)  a contribution made into the Government Fund amounting to USD100,000 depending on the number of dependents included in the application or (2) an investment in designated Real Estate with a value of at least USD 200,000. Additional payments for any dependents included in an application, due diligence fees, government fees, and other fees are also payable.”

 MMCE does not mention the “option” under which it is legally mandated to operate under the Dominica Economic Citizenship programme and no one knows where this company fits in the CBI scheme of things from a legal perspective. The question therefore is what gives MMCE the legal authority to sell Dominican Citizenship if the company is not doing so under either of the options outlined under the laws of Dominica.

 According to Mr. Anthony Haiden, the company has been actively involved in the construction of social housing in Dominica since 2016, when the company signed a contract with the government of Dominica to build housing intended to resettle those displaced by Tropical Storm Erika in the Petite Savanne area. At the time, the Prime Minister of Dominica advised that MMCE was actually engaged in the construction of the houses even before the government formally established a contract with the firm- something that is unheard of in government circles. 

Under the ‘sweetheart’ Agreement, as explained by Mr. Haiden, the company assumed all costs and responsibilities related to the construction of social housing projects (activities that ought to be part of the government’s recurrent revenues and expenses as part of the Consolidated fund) and then proceeds to market the “contribution option” of CIP (not the investment option) on the same terms as everyone else by some lose arrangement, which does not appear to be contemplated under the laws of Dominica.

 The “contributed funds” (not investments) that MMCE raises are then transferred to an escrow account and the funds are distributed from this escrow account partly to the State of Dominica, partly to the housing development. The distribution of these funds is regulated by the agreement (supposedly pursuant to the legislative framework) stipulating the share of the state and the share for the projects. Distribution is provisioned by the progress of construction via technical reports overseen by the Ministry of Housing, an arrangement that the Opposition UWP has described as a “sweetheart deal” but which it has been forbidden from saying in the parliament of Dominica by the Speaker of the House.  For this reason, among others, the citizens of Dominica have a plethora of reason to be very concerned about the MMCE operations are part of the CBI programme of Dominica.

 

Leave a Reply

Your email address will not be published. Required fields are marked *