Caribbean Tightens Oversight of Citizenship by Investment Programs – Establishes Regional Regulatory Body

After years of pressure from the international community regarding the transparency of Citizenship by Investment Programs (CIP), the Caribbean region is entering a new phase of reform. The Eastern Caribbean Currency Union (ECCU) has appointed legal expert Lydia Elliott to develop a legal framework for a new regional regulatory body, marking a significant step toward establishing common standards for investment-based naturalization programs.

This move not only demonstrates efforts to strengthen oversight and accountability but also aligns with the region’s broader strategy to maintain trust with international partners, particularly the United States and the European Union.

How Will the New Regulatory Body Reshape Caribbean CIPs?

According to the Eastern Caribbean Central Bank (ECCB), Lydia Elliott was selected as a legal consultant for a seven-month term, ending in August 2025. With over 40 years of legal experience in the region, including serving as Legal Advisor to ECCB from 1992 to 2003, Elliott is expected to establish a comprehensive and effective regulatory framework, ensuring the Caribbean remains competitive in the global investment migration market.

The new regulatory body will be responsible for three key areas:

• Establishing and enforcing common standards across CIP jurisdictions
• Monitoring and investigating complaints related to the application process
• Coordinating cooperation among Caribbean nations to ensure policy consistency and credibility

In January, Elliott presented her initial plans to the Interim Regulatory Commission (IRC), an eight-member panel representing Caribbean CIP jurisdictions. The commission expressed strong support for her approach, emphasizing the importance of broad consultation with stakeholders to ensure consensus before implementing new regulations.

Pressure from the U.S. and EU: What Are They Demanding?

This initiative is not solely a domestic decision by the Caribbean but also a direct outcome of ongoing negotiations with the United States and Europe.

In March 2024, Caribbean governments signed a Memorandum of Agreement, committing to the creation of a regional oversight body as part of six key principles agreed upon with the U.S. Treasury Department in February 2023. These principles include:

• Coordinating application denials among countries to prevent applicants rejected in one jurisdiction from being approved in another
• Mandating in-person interviews to strengthen applicant vetting beyond document verification

Both the U.S. and EU have raised concerns that Caribbean CIPs could provide loopholes for individuals involved in money laundering or sanctions evasion. As a result, this regulatory overhaul is not just a voluntary measure by Caribbean nations but also a response to mounting external pressures.

Will These Changes Impact Investors?

According to David Lesperance, founder of Lesperance & Associates, establishing a regional regulatory system is a necessary step to safeguard the integrity of these programs. However, he also warned that:

• Overly strict regulations could weaken the Caribbean’s competitive edge compared to other CBI programs globally
• If investment costs and due diligence requirements rise too sharply, investors may shift to alternative programs, such as those offered by Turkey or Malta

Despite potential challenges, the Caribbean still holds a significant advantage: its passports offer highly attractive visa-free access, including to the EU and the UK. Enhancing transparency and regulatory controls could help maintain trust with Western governments, reducing the risk of future visa restrictions.

What Comes Next?

Starting in March 2025, Elliott will lead consultation meetings with government officials, industry stakeholders, and related organizations across the Caribbean to refine the regulatory framework.

Additionally, the ECCB has opened public feedback channels, inviting stakeholders to contribute their insights into shaping the future of Caribbean CIPs.

While these reforms may lead to stricter vetting procedures, they are also expected to enhance the credibility of Caribbean CIPs and attract long-term investors. Striking a balance between international demands and maintaining the programs’ competitiveness will be a critical challenge for Caribbean nations moving forward.