Second-citizenship business booms amid global strife

Armand Arton. (Photo: Jonathan Glynn-Smith)
Updated 11 May 2017
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Second-citizenship business booms amid global strife

JEDDAH: Business might be booming for Armand Arton, but that does not necessarily mean the world is a better place.
As president of Arton Capital, the self-described “ambassador of the global citizen movement” helps moneyed individuals — including an increasing number from the Middle East — gain citizenship elsewhere and the all-important second passport that can bring.
But it is a business that is strongly correlated with global upheaval and conflict. The more misery there is, the more people want to move — whether they are a wealthy investor of the kind Arton deals with or a forced migrant in what is the worst refugee crisis since World War II.
“Fortunately or unfortunately, our industry is very much linked… with the political stability around the world,” Arton told Arab News.
“Knowing where that is going — it is not rocket science — I can only imagine that our industry will grow directly with that. More of Trump, more of Brexit, North-South Korea, of China, of Russia…” And the list goes on.
Arton Capital, which is headquartered in Montreal, Canada, offers access to investor programs for residence and citizenship in about 12 countries, including Antigua and Barbuda, Bulgaria, Cyprus and Portugal.
It is one of the biggest players in a niche industry, with a total of about 25 countries offering citizenship-through-investment programs.
Applicants need to meet certain criteria and typically make a donation or investment in the country in which they wish to gain citizenship. For example, someone able to invest at least $500,000 in a targeted commercial sector in the US and create full-time employment for at least 10 qualified US workers, may be eligible for American passports for themselves and family.
This is clearly not something that is open to everyone: Arton estimates the industry as a whole sees about 20,000 to 25,000 families obtain second citizenship through investment each year — a blip on the radar of total global migration.

Middle East unrest
His company takes on between 500-600 cases a year, advising clients on destinations, conducting due diligence on investments and facilitating transactions. Most governments with citizenship-by-investment schemes do not deal directly with individuals, leaving a gap in the market for licensed companies like Arton Capital and its competitors.
The industry has raised billions in funds for participating countries, estimates suggest, and Arton believes that demand for citizenship-by-investment programs will only increase: “I think there will probably be 50 countries in the next 10 years doing it.”
About six in 10 of those looking for second citizenship are Chinese, Arton said. But the Arab Spring saw the number of applicants from the Middle East and North Africa (MENA) double.
“The Middle East and North Africa — from Morocco to Afghanistan — used to be about 10 to 15 percent of the global market. Right now, it is 30 percent. That includes Iran, which is a very wealthy country, with a lot of sanctions and restrictions,” Arton said.
Inquires from the Middle East have again picked up since the election of Donald Trump as US president, he added.
“(We’ve had) 50 percent more inquires for second passports from the Middle East since the election,” Arton told Arab News during an interview in London earlier this year.
“People are much more nervous about the extreme right overall… And definitely with the (proposed) travel ban, people are realizing that one passport can very easily be limiting your ability, tomorrow morning, to travel anywhere you want. But by having a few, it will always give you that extra freedom.”

Philanthropic responsibility
Such is the boom in inquiries from the Middle East, that Arton jokingly wonders whether Trump, forever the businessman, might ask for a cut of his revenues.
But another more serious concern is the bad press some citizen-by-investment programs have received. In 2014, for example, the US Treasury Department Financial Crimes Enforcement Network (FinCEN) warned that passports obtained through the St. Kitts and Nevis (SKN) program had been used to facilitate financial crime.
“Illicit actors are abusing this program to acquire SKN citizenship in order to mask their identity and geographic background for the purpose of evading the US or international sanctions or engaging in other financial crime,” FinCEN said at the time.
“For example, FinCEN believes that several Iranian nationals designated by the Office of Foreign Assets Control (OFAC) have obtained passports issued through the SKN Citizenship-by-Investment program.”
Arton, understandably, is quick to defend his business.
“For every bad guy, there are thousands of good people and good cases,” he told Arab News during a brief visit to the UK capital. “This industry has not only changed the lives of hundreds of thousands of people who now lead better lives, and have access to great education and medical systems, but also the countries have received so much money.”
Another issue, of course, is that the services Arton Capital offers — helping rich people, many from war-torn countries, gain second passports — is not available to the millions of refugees fleeing conflict zones.
Conscious of this, Arton Capital also has a philanthropic slant. The company insists that its own clients make a donation of between $100 and $1,000, which Arton Capital matches. And Arton himself has even proposed a “global citizen tax” in Europe, under which 2 percent of second-passport applicants’ investments would go to refugee causes.
“Since the refugee crisis of the last three or four years, we have really been in the forefront of making that link, between the wealthy immigrant and the refugee,” he said.
“They come from the same countries — Syrians, Egyptians … While I deal with some of the wealthiest people in these countries, who can afford to invest a couple of hundred thousand or millions to get a better access and better life with their kids, hundreds of thousands of their compatriots are risking their lives crossing the sea, for the same reason: Giving better options to their kids.”
Arton’s own history and Armenian origins have informed his current role and interests as “ambassador of the global citizen movement.” He was born in Bulgaria, but his childhood saw him move from Morocco to Europe and then to Canada.
He is convincing in his explanation of how his business is about much more than just arranging passports for the rich.
“What is a global citizen? It is somebody who understands that, with this extra access that has been provided to him through these programs, he has the obligation, not only an option, to make the world a better place,” said Arton.
“It is not somebody who has a few passports in his pocket and feels like Jason Bourne. It’s more somebody who understands that privilege comes with responsibility.”


Saudi energy minister recommends driving down oil inventories, says supply plentiful

Updated 50 min 12 sec ago
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Saudi energy minister recommends driving down oil inventories, says supply plentiful

  • Oil supplies were sufficient and stockpiles were still rising despite massive output drops from Iran and Venezuela
  • Producer nations discussed how to stabilise a volatile oil market amid rising US-Iran tensions in the Gulf, which threaten to disrupt global supply

JEDDAH: Saudi Arabia’s Energy Minister Khalid Al-Falih said on Sunday he recommended “gently” driving oil inventories down at a time of plentiful global supplies and that OPEC would not make hasty decisions about output ahead of a June meeting.
“Overall, the market is in a delicate situation,” Falih told reporters before a ministerial panel meeting of top OPEC and non-OPEC oil producers, including Saudi Arabia and Russia.
While there is concern about supply disruptions, inventories are rising and the market should see a “comfortable supply situation in the weeks and months to come,” he said.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is de facto leader, would have more data at its next meeting in late June to help it reach the best decision on output, Falih said.
“It is critical that we don’t make hasty decisions – given the conflicting data, the complexity involved, and the evolving situation,” he said, describing the outlook as “quite foggy” due in part to a trade dispute between the United States and China.
“But I want to assure you that our group has always done the right thing in the interests of both consumers and producers; and we will continue to do so,” he added.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
Russian Energy Minister Alexander Novak told reporters that different options were available for the output deal, including a rise in production in the second half of the year.
The energy minister of the United Arab Emirates, Suhail Al-Mazrouei, said oil producers were capable of filling any gap in the oil market and that relaxing supply cuts was not “the right decision.”
Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse and that OPEC would act wisely to maintain sustainable market balance.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” he said.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, data from the government’s Energy Information Administration showed on Wednesday.
DELICATE BALANCE
Saudi Arabia sees no need to boost production quickly now, with oil at around $70 a barrel, as it fears a price crash and a build-up in inventories, OPEC sources said, adding that Russia wants to increase supply after June.
The United States, not a member of OPEC+ but a close ally of Riyadh, wants the group to boost output to bring oil prices down.
Falih has to find a delicate balance between keeping the oil market well supplied and prices high enough for Riyadh’s budget needs, while pleasing Moscow to ensure Russia remains in the OPEC+ pact, and being responsive to the concerns of the United States and the rest of OPEC+, the sources said earlier.
Sunday’s meeting of the ministerial panel, known as the JMMC, comes amid concerns of a tight market. Iran’s oil exports are likely to drop further in May and shipments from Venezuela could fall again in coming weeks due to US sanctions.
Oil contamination also forced Russia to halt flows along the Druzhba pipeline — a key conduit for crude into Eastern Europe and Germany — in April. The suspension, as yet of unclear duration, left refiners scrambling to find supplies.
Russia’s Novak told reporters that oil supplies to Poland via the pipeline would start on Monday.
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
REGIONAL TENSIONS
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over disruptions in Middle East shipments due to US-Iran political tensions.
Tensions between Saudi Arabia and Iran are running high after last week’s attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the Kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi militia claimed responsibility. 
Saudi Arabia’s minister of state for foreign affairs said on Sunday that the Kingdom wants to avert war in the region but stands ready to respond with “all strength” following the attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” Falih said. “They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”
The attacks come as the United States and Iran spar over Washington’s tightening of sanctions aimed at cutting Iranian oil exports to zero, and an increased US military presence in the Gulf over perceived Iranian threats to US interests.