Second-citizenship business booms amid global strife

Armand Arton. (Photo: Jonathan Glynn-Smith)
Updated 11 May 2017

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.”

EU split over budget as Germans push for curbs

Updated 17 September 2019

EU split over budget as Germans push for curbs

  • Divisions over the next 2021-2027 financial framework run deeper than usual

BERLIN: The EU may need to scale back its plans to boost growth and counter climate change if it fails to quickly agree on a long-term budget, European officials said on Monday, as Germany and other northern states push to restrict spending.

The EU administration is funded with a seven-year budget. The size and targets are often subject to prolonged haggling among its member states.

But divisions over the next 2021-2027 financial framework run deeper than usual at a time when the bloc faces risks of a new economic recession and uncertainty over the outcome of the Brexit process — which is expected to lead Britain, one of the largest contributors to the EU coffers, out of the union.

“My big concern is that Europe will be in a difficult economic and geopolitical situation if there is no budget by the first of January,” the EU commissioner in charge of the talks, Guenther Oettinger, told an EU ministers’ meeting in Brussels.

He said the urgency to strike a deal was heightened by the bloc’s weakening economy, with Germany and other EU states stagnating. He said it would take years to find a compromise at the current pace of negotiation.

The long-term financial framework needs to be adopted well in advance of its starting date because it has to be translated into yearly spending programs which also usually require long negotiations.

The EU’s executive commission proposed last year a seven-year budget of roughly €1.1 trillion ($1.22 trillion) which would represent 1.11 percent of the bloc’s Gross National Income (GNI), a measure of domestic output. The estimate does not include funding from Britain, which is planning to leave the EU at the end of October.

But Germany, the EU’s largest economy and the main contributor to the budget, has made it known that it wants to limit spending to 1 percent of economic output, according to a document seen by Reuters. Sweden and the Netherlands openly support Berlin’s more cautious spending plans.

The budget for the current seven-year period also amounts to 1 percent of GNI, but Brussels said it has to go up because of planned higher spending on research, digital economy, border control and defense.

Berlin said the proposed cap would represent a net increase in spending by EU states, as the bloc would have to do without contributions from Britain. It also urged more spending to counter climate change.

The European Parliament, backed by southern and eastern European states who are net receivers of EU funds, wants a bigger budget, set at 1.3 percent of the bloc’s GNI.

Lawmakers also urged further funding for new projects on climate change and for unemployment benefits as mentioned by the commission’s president-designate Ursula von der Leynen in her inaugural speech after appointment in July. Spain’s state secretary for EU affairs, Marco Aguiriano Nalda, said differences between the proposals made it almost impossible to find a compromise before the end of the year.

“I have to express strong worries and reservations on the state of play of the financial framework,” he told his counterparts at a televised session of the ministerial meeting.

Poland’s State Secretary for European Affairs, Konrad Szymanski, told the same meeting that reduced spending caps would inevitably translate into lower ambitions.

A compromise is made more difficult also by plans to make EU funding conditional on upholding the bloc’s values, including the rule of law. Germany called for this “conditionality” in its confidential document reviewed by Reuters.