Aya Hussein Mahmoud

Relations between the European Union and five Caribbean countries have become increasingly strained over the continued operation of citizenship-by-investment (CBI) programs, which allow foreign nationals to acquire citizenship in exchange for financial contributions or economic investment. European concerns have grown over the potential security and regulatory risks associated with these programs, particularly in relation to migration management, money laundering, and the circumvention of international sanctions.Brussels believes that the reforms introduced by the countries concerned have not gone far enough to address these risks, prompting the European Union to warn that it could suspend or ultimately withdraw their visa-free access to the Schengen Area.Brussels’ MotivesThe European Union’s increasingly assertive stance toward Eastern Caribbean countries is driven by several considerations, the most significant of which are as follows:1. Pressuring Eastern Caribbean Countries to End or Restructure Citizenship Programs: The EU’s growing pressure on Eastern Caribbean countries reflects Brussels’ efforts to encourage them to phase out or fundamentally restructure their citizenship-by-investment programs. The European Union argues that such programs may end up granting Caribbean passports to nationals of countries that would otherwise require a visa to enter the EU, effectively giving them visa-free access to the Schengen Area without undergoing the usual visa-screening procedures.&nbsp;Against this backdrop, the European Union has stepped up pressure on five Eastern Caribbean countries—Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, and Saint Lucia—<a href="https://amsterdamnews.com/news/2026/07/16/eu-demands-shutdown-of-golden-passports-scheme/" rel="noopener noreferrer" target="_blank">calling</a> on them to phase out their so-called "golden passport" programs by June 2028. The demand is based on the EU’s revised visa-suspension mechanism, which entered into force in December 2025. Brussels has warned that the continued operation of these programs could lead to a review of the Schengen visa-free status currently enjoyed by citizens of these countries.Over the past several decades, these countries have developed programs that grant citizenship to foreign nationals in exchange for financial investment, property purchases, or direct contributions to state funds. The required investment typically starts at around $200,000, while successful applicants receive passports that provide visa-free access to approximately 140 countries worldwide.These programs represent an important source of revenue for the countries concerned, making compliance with European demands a significant political and economic challenge given their limited economic alternatives. The EU’s position, meanwhile, reflects its determination to impose stricter standards on the administration of citizenship-by-investment programs, particularly with regard to transparency, the need for a genuine link between applicants and the granting state, and stronger governance and oversight mechanisms.2. Growing Security Concerns Over Holders of "Golden Passports": The European Union considers so-called "golden passports" a potential security vulnerability that may also increase money-laundering risks, thereby undermining the integrity of the visa-free travel regime. Its concerns stem from the fact that citizenship programs <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_25_3061" rel="noopener noreferrer" target="_blank">allow</a> nationals of countries whose citizens would normally require a visa to enter the EU to obtain citizenship in an Eastern Caribbean country through investment.According to the European Commission, such arrangements can limit European authorities’ ability to assess the security risks associated with travelers, particularly because security-screening standards vary among citizenship-granting countries. This could potentially allow individuals who pose security risks to enjoy freedom of movement within the European Union.Although the countries concerned have introduced measures to tighten applicant screening and improve information-sharing with international partners, the European Commission continues to regard the high volume of applications, short processing times, and low rejection rates as factors that heighten the security risks associated with these programs.3. Restricting Attempts to Circumvent International Sanctions: The EU’s tougher stance on citizenship-by-investment programs is also <a href="https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52025DC0792" rel="noopener noreferrer" target="_blank">driven</a> by its determination to close loopholes that could enable individuals subject to international sanctions to acquire a new nationality, allowing them to travel or conduct economic activities under a different legal identity.Some of these programs do not require applicants to establish actual residence or demonstrate a genuine connection to the country granting citizenship. This could undermine the effectiveness of European sanctions regimes and make it more difficult to trace the assets and financial activities of sanctioned individuals. Following the extensive sanctions imposed on Russia and Belarus, European concerns in this regard have intensified, and it has thus become an increasingly important pillar of EU policy to prevent circumvention of sanctions.As the European Union considers the measures adopted by Eastern Caribbean countries insufficient to address the risks associated with citizenship programs, it continues to call on them to strengthen due diligence procedures for citizenship applicants, conduct more extensive checks on the sources of applicants’ funds, and improve security information-sharing. These measures are intended to reduce the risk that citizenship-by-investment programs could be exploited to circumvent international sanctions.4. Protecting the Credibility of Schengen Visa Waivers and Rejecting the "Commercialization of Citizenship": The European Union views visa-free travel as a system founded on mutual trust between the EU and its partner countries. Accordingly, shortcomings in citizenship-granting standards or applicant-screening procedures are regarded not merely as security deficiencies, but as risks that could undermine the credibility of the Schengen visa-free regime itself.From this perspective, citizenship-by-investment programs have generated considerable concern in Europe because granting nationality to individuals with no genuine connection to the issuing country may weaken the foundations on which visa-free travel arrangements are based.Against this backdrop, in April 2025 the Court of Justice of the European Union <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62023CJ0181" rel="noopener noreferrer" target="_blank">ruled</a> that granting citizenship in exchange for predetermined payments or investments amounted to the "commercialization of nationality" and was incompatible with the principle of sincere cooperation among EU member states. The ruling prompted Malta—the last EU member state operating a citizenship-by-investment program—to discontinue it, further reinforcing the EU’s broader effort to curb such practices.Building on this approach, the European Union expanded its visa-suspension mechanism at the end of 2025 to cover third countries <a href="https://www.consilium.europa.eu/en/press/press-releases/2025/06/17/visa-policy-council-and-european-parliament-secure-a-deal-on-rules-about-the-suspension-of-visa-free-travel-for-third-countries/" rel="noopener noreferrer" target="_blank">operating</a> citizenship-by-investment programs. This gave the EU greater scope to impose restrictive measures on countries whose citizenship programs it considers a potential threat to the integrity of its visa-free travel regime.Potential ScenariosGiven the differing positions of the European Union and Eastern Caribbean countries on citizenship-by-investment programs, the dispute could evolve along several possible lines. The most significant are as follows:1. Eastern Caribbean Countries Are Likely to Pursue a Negotiated and Reform-Oriented Approach: Amid mounting European pressure, Eastern Caribbean countries are likely to pursue a combination of diplomatic engagement and further reforms. The countries <a href="https://pressroomopm.gov.dm/statement-by-the-heads-of-government-of-the-participating-eastern-caribbean-states-on-citizenship-by-investment-programmes-and-engagement-with-the-european-union/" rel="noopener noreferrer" target="_blank">concerned</a> have already expressed their willingness to coordinate a common regional position and engage diplomatically with the European Union, including by sending a high-level delegation to Brussels to present their position and discuss European concerns. This expected approach reflects growing recognition among Eastern Caribbean governments that losing visa-free access to the Schengen Area could reduce the attractiveness of their citizenship-by-investment programs and affect the revenues they generate.At the same time, Eastern Caribbean countries are likely to accelerate reforms to their citizenship-by-investment programs, some of which are already underway. These include harmonizing minimum investment thresholds, strengthening transparency standards, and adopting common principles for the governance of such programs. Nevertheless, with the <a href="https://www.imidaily.com/caribbean/end-cbi-by-june-2028-or-risk-schengen-access-eu-writes-to-caribbean-states-antigua-says/" rel="noopener noreferrer" target="_blank">EU</a> continuing to find that the reforms introduced by Eastern Caribbean countries are insufficient to address security risks, it could prompt both sides to step up negotiations in the coming period. The objective would be to reach an agreement that strikes a balance between European requirements for stronger security safeguards and the substantial reliance that these countries have on revenues generated by their citizenship programs.2. Continued Divergence Between European Requirements and Caribbean Economic Needs: Growing European pressure over citizenship-by-investment programs is likely to make it increasingly difficult to reconcile the EU’s security and regulatory priorities with the economic needs of Eastern Caribbean countries. While Brussels views these programs as a potential source of risks to border security and the integrity of visa-free travel arrangements, Caribbean governments regard them as an essential economic pillar that supports public finances, funds infrastructure projects, and boosts their ability to address economic challenges.If this divergence persists, the dispute between the two sides could become prolonged, particularly given their differing priorities. Citizenship-by-investment programs may therefore remain a recurring source of tension in EU-Caribbean relations unless both sides can reach a formula that balances European security considerations with the economic interests of Caribbean states.3. Tighter EU Regulatory Restrictions on Citizenship Programs: The European Union is expected to continue pursuing a policy of gradual pressure on Eastern Caribbean countries by tightening regulatory requirements governing citizenship programs, while postponing the suspension of visa-free Schengen access and retaining it as an escalation option should the reforms implemented be deemed insufficient to address existing risks.In this context, EU institutions may call for broader security information-sharing mechanisms, more rigorous background checks on citizenship applicants, and stricter due diligence requirements. Citizenship-by-investment programs could also be subjected to regular monitoring and assessment to ensure compliance with European standards on security and transparency.4. Declining Appeal of Caribbean Passports if Visa-Free Schengen Access Is Suspended: European escalation could reduce the international value and appeal of passports issued by Eastern Caribbean countries, given that the attractiveness of citizenship-by-investment programs depends heavily on the extensive visa-free travel opportunities these passports provide, particularly access to the Schengen Area.Accordingly, if the European Union follows through on its threat to suspend or withdraw visa-free access, it could erode one of the principal competitive advantages these programs use to attract foreign investors. This would diminish the international appeal of Caribbean passports and weaken one of the key factors that has sustained the attractiveness of citizenship-by-investment programs in recent years. It could also negatively affect government revenues in Caribbean countries that rely on these programs as an important source of development financing.5. Brussels Could Link Third-Country Visa Waivers More Closely to Compliance with EU Standards: The current dispute could encourage the European Union to extend the approach it has adopted toward Eastern Caribbean countries to other non-EU countries benefiting from visa-free Schengen access. Continued visa exemption could therefore become increasingly conditional on compliance with European standards in areas such as security, transparency, and migration management.Such an approach would be consistent with Brussels’ efforts to harmonize its treatment of citizenship-by-investment programs, mitigate the risks associated with them, and deter visa-exempt countries from introducing similar schemes.The case of <a href="https://www.consilium.europa.eu/en/press/press-releases/2024/12/12/vanuatu-council-ends-visa-exemption/" rel="noopener noreferrer" target="_blank">Vanuatu</a> reinforces this possibility. It became the first country to have its Schengen visa exemption suspended and subsequently withdrawn altogether because of security concerns associated with its citizenship-by-investment program. This demonstrates the EU’s willingness to use its visa policy as a tool for ensuring that partner countries comply with its security and regulatory standards. Continued application of this approach could therefore increase pressure on countries operating citizenship-by-investment programs and encourage them to revise their policies to align more closely with European requirements.ConclusionThe dispute between the European Union and the five Caribbean countries reflects a broader shift in Brussels’ approach to visa-free travel. EU visa policy is no longer shaped solely by considerations related to bilateral relations, but is increasingly linked to standards governing security, migration, and governance. Against this backdrop, escalating European threats to suspend or terminate visa-free Schengen access for Eastern Caribbean countries point to a growing willingness to use visa policy as an instrument for encouraging partner countries to comply with EU security and regulatory standards.At the same time, the dispute highlights the continuing tension between the EU’s security and governance priorities and the economic and development needs of small island states. Accordingly, both sides are likely to seek a negotiated settlement based on tighter oversight and further reforms to citizenship-by-investment programs. However, the possibility of additional restrictive measures is likely to remain on the table if the European Union concludes that Caribbean reforms do not adequately address its security and regulatory concerns.

Why Is the EU Threatening Eastern Caribbean Countries’ Schengen Access?