- The EU and UK have tightened scrutiny of Caribbean CBI, with new EU powers focused on "genuine link" concerns and the UK's 2023 visa requirement for Dominica as a warning signal.
- FATF/OECD highlights significant money‑laundering, fraud and misuse risks in CBI/RBI and calls for multilayered, independent due diligence and information sharing.
- OECS states have begun harmonizing CBI policy, including common legislation and a US$200,000 minimum price floor, to address EU concerns.
- Law firms should conduct program-by-program gap analyses, update risk disclosures on visa-free access risk, and prepare policy memos anticipating 2026 compliance baselines.
Caribbean citizenship-by-investment (CBI) is entering a new era of compliance. The EU's evolving approach to visa-free regimes and FATF recommendations are redefining what "good" looks like—especially on due diligence. For investors and advisors, the question is no longer just price and processing time; it is whether a passport will keep its travel utility under closer EU oversight.
Overview: EU and UK scrutiny of Caribbean CBI programs — what changed since 2023
FATF/OECD risk assessment: money‑laundering
fraud and other misuse risks in CBI/RBI
EU revised visa‑suspension mechanism and the 'genuine link' test: legal thresholds
timelines and consequences
Precedent and signals: the Dominica visa ban and travel‑access impacts on Caribbean CBI jurisdictions
Caribbean policy responses: OECS harmonization
uniform due diligence and minimum price floors
Overview: EU and UK scrutiny of Caribbean CBI programs — what changed since 2023
Since mid‑2023, European and UK authorities have escalated their scrutiny of Caribbean CBI. The European Commission formally signaled concerns about visa‑free countries with investor citizenship schemes, highlighting "some countries in the Caribbean" as potential security risks in its monitoring of visa‑waiver arrangements. In parallel, the UK imposed a visa requirement on Dominica in July 2023 citing "clear and evident abuse" of its CBI scheme and grants of citizenship to individuals posing security risks.
The EU has since agreed reforms to its visa‑suspension mechanism that explicitly target CBI models lacking a "genuine link" to the issuing state, empowering temporary suspensions and potential revocations of visa‑free status where risks are not mitigated. These moves raise the compliance baseline for Caribbean CBI and foreground visa‑free access risk as a central client consideration.
FATF/OECD risk assessment: money‑laundering
The FATF/OECD's 2023 report on the misuse of CBI/RBI programs concludes these schemes carry "significant risks of money laundering," especially where vetting is outsourced, documentation can be forged, or origin‑of‑funds checks are shallow. The report calls for multilayered due diligence across the applicant lifecycle.
- Independent, multi‑jurisdictional due diligence (not solely relying on local checks).
- Robust source‑of‑funds/wealth verification.
- Ongoing monitoring and post‑issuance revocation mechanisms.
Fraud and other misuse risks in CBI/RBI
Beyond AML, FATF/OECD flags risks of identity fraud, document forgery, and the use of CBI to circumvent sanctions, travel restrictions, or law enforcement cooperation. It recommends in‑person interviews, biometric verification, information‑sharing with partner states, and transparency over rejections and revocations to deter misuse.
EU revised visa‑suspension mechanism and the 'genuine link' test: legal thresholds
The EU's revised mechanism, agreed in April 2025, introduces explicit scrutiny of investor citizenship programs that do not foster a "genuine link" between the passport holder and the state—such as residence, integration or sustained economic contribution. Under the revision, countries operating purely transactional CBI models face enhanced risk of temporary suspension or permanent revocation of Schengen visa‑free access. This sits atop the Commission's ongoing monitoring of visa‑free regimes and willingness to engage or recommend action where security concerns persist.
Timelines and consequences
Key milestones and potential outcomes to manage:
- April 2025: EU political agreement to strengthen the visa‑suspension mechanism with a focus on CBI and the "genuine link" standard.
- Ongoing: Commission monitoring of visa‑free countries and engagement with states operating CBI.
- Immediate precedent: rapid UK action against Dominica's visa‑free status (July 2023) for CBI-related security concerns.
For planning, firms should assume a conservative 2025–2026 horizon for alignment with EU due diligence expectations across the Caribbean. While the EU has not imposed a fixed "deadline," the combination of enhanced legal tools and active monitoring raises the probability—and speed—of consequences where gaps persist.
Advisory note: Fiscal pressures can complicate reform. For example, St. Kitts & Nevis reportedly saw a 60% CBI revenue decline in 2024 and an estimated budget deficit of ~11% of GDP, illustrating why governments may be tempted to loosen standards—precisely the wrong move under EU/FATF scrutiny.
Precedent and signals: the Dominica visa ban and travel‑access impacts on Caribbean CBI jurisdictions
The UK's July 2023 decision to end visa‑free entry for Dominica explicitly linked CBI due diligence shortcomings to national security risks. The precedent is clear: if vetting or post‑issuance controls are weak, major partners can—and will—curtail travel access quickly, eroding the core value proposition of CBI passports.
For the EU, the Commission's monitoring and the strengthened suspension tool together suggest a similar path is available should risk indicators persist in any CBI jurisdiction.
Caribbean policy responses: OECS harmonization
Caribbean authorities have begun to respond collectively. OECS countries with CBI programs announced work on common legislation, uniform due diligence protocols, and other steps in 2024 explicitly to address EU concerns and improve integrity signals.
Uniform due diligence and minimum price floors
Four of five Caribbean CIPs signed an MoU in March 2024 instituting a US$200,000 minimum price floor, curbs on discounting, and closer regulatory coordination—measures designed to reduce arbitrage and support higher due diligence budgets. While these are meaningful, FATF/OECD stresses that pricing reforms are only part of the solution; programs also need independent, multi‑layer checks and transparent revocation/reporting frameworks to align with global AML expectations.
Compliance checklist for firms advising on Caribbean CBI (2025–2026)
| Risk area | EU/FATF expectation | Advisor action |
|---|---|---|
| Genuine link | Programs should evidence more than transactional ties to citizenship | Prioritize options with residence/physical presence or community integration pathways; warn clients about visa‑free access risk. |
| Due diligence | Multilayered, independent checks; robust SOF/SOW; post‑issuance monitoring | Document vetting vendors, cross‑border data sources, and revocation statistics in client memos. |
| Program governance | Harmonized laws, transparency, responsiveness to partner concerns | Track legislative updates and intergovernmental MOUs; update risk disclosures quarterly. |
| Pricing | Price floors to prevent discounting and fund integrity measures | Flag sub‑floor "offers" as red‑flags; verify official fee schedules. |
What law firms should do now
- Run a program‑by‑program gap analysis against FATF pillars and the EU "genuine link" lens. Document strengths and gaps with citations to official notices and legislation.
- Update client risk disclosures to highlight visa‑free access risk, including links to the EU monitoring communication and the UK's Dominica precedent.
- Prepare 2026 policy memos: outline what "baseline compliance" could look like (genuine link indicators, independent DD, intergovernmental data‑sharing) and how each program measures up.
- Segment clients by risk profile. For higher‑risk applicants, emphasize jurisdictions with the strongest independent due diligence and revocation powers, or discuss alternative residence/citizenship pathways.
- Plan diversification strategies for clients seeking mobility and investment protection—e.g., pairing a Caribbean passport with residence rights elsewhere. For alternatives, explore citizenship options, visa strategies, or investment-led relocations.
For clients prioritizing durable mobility, framing expectations conservatively is key. Avoid promising Schengen visa‑free access where program reforms are pending; stress that EU due diligence CBI standards are evolving and outcomes are not guaranteed.
If you need a bespoke risk memo or client briefing aligned to these standards, contact our team for tailored counsel and documentation.
Conclusion
Caribbean CBI compliance is shifting under EU and FATF scrutiny. The revised EU suspension mechanism and the "genuine link" lens, coupled with FATF recommendations, mean visa‑free access risk is now central to program selection and client advice. With OECS harmonization and price floors underway, the region is moving in the right direction, but firms should build 2026-ready baselines now and guide clients conservatively. For strategic alternatives or second‑option hedges, our citizenship, visa, and investment teams can advise. Speak with us at /contact/.