St. Kitts and Nevis Citizenship-by-Investment Program: A Risk for Financial Crime

The Financial Crimes Enforcement Network (FinCEN) has issued a warning to financial institutions worldwide about the potential risks associated with the St. Kitts and Nevis Citizenship-by-Investment program. This program, which allows foreign nationals to obtain passports in exchange for investments or contributions, is being exploited by illicit actors for nefarious purposes.

Warning Signs of Illicit Activity

FinCEN has identified several warning signs that indicate a potential risk of financial crime:

• Foreign nationals investing in designated real estate or contributing to the Sugar Industry Diversification Foundation in exchange for citizenship
• Passports obtained through this program being used to mask identity and engage in financial crime
• Iranian nationals obtaining passports despite being sanctioned by the U.S. Office of Foreign Assets Control (OFAC)

Lax Controls and Attractive Option

FinCEN believes that the lax controls administered by the St. Kitts and Nevis government make it an attractive option for illicit actors seeking to evade sanctions or engage in other financial crime. Despite public assurances from the government to improve these controls, FinCEN remains concerned about the continued exploitation of this program.

Action Required from Financial Institutions

FinCEN is urging financial institutions to take action to mitigate the risk of dealing with customers using St. Kitts and Nevis passports obtained through this program. This includes:

• Conducting risk-based customer due diligence
• Verifying a customer’s identity using government-issued identification other than or in addition to the passport
• Using non-documentary methods to form a reasonable belief about the true identity of the customer

If a financial institution suspects that a transaction involves funds derived from illicit activity or is designed to evade regulations, they should file a Suspicious Activity Report (SAR). FinCEN requests that financial institutions include the term “SKN Passport” in both the narrative portion and in the “Other” fields in Part II items 29 through 38 of the SAR.

No Impact on Relations with St. Kitts and Nevis

FinCEN emphasizes that this advisory is intended to highlight the illicit finance risks posed by the St. Kitts and Nevis Citizenship-by-Investment program and does not affect normal relationships between financial institutions in the United States and the Federation of St. Kitts and Nevis.

Financial institutions with questions or comments regarding this advisory should contact the FinCEN Resource Center at (800) 767-2825 or (703) 905-3591. Those wishing to report suspicious transactions related to terrorist activity can call the Financial Institutions Toll-Free Hotline at (866) 556-3974, available 7 days a week, 24 hours a day.