MEPs seeking to bar entry to EU: Is security really the motivation?

From 2008 to 2009-10, carbon credits were used to commit VAT fraud in EU countries such as Germany and Italy in a scam that has been estimated to have cost the European Union over €5 billion in lost tax revenue. In short, carbon credits were first imported from one EU member state to another VAT-free, and then sold within the same EU member state, where VAT was charged on the buyer. The seller, however, never delivered the VAT to the relevant tax authority, ultimately vanishing from the market. Because of the multiple entities used to buy and sell the carbon credits, the fraud took the form of a ‘carousel.’

Some EU nations, including France and Britain, moved to end the fraud by adopting measures such as charging no VAT on carbon credit trading. Others, however, were less prompt in their response, thereby becoming the target of fraudsters who could no longer pursue their illicit activities in their home countries.

British nationals were heavily involved in the fraud, with many acting in Germany. In a trial in Frankfurt in late 2011, three were convicted for their role in a €3 million conspiracy. Separately, Mohammad Safdar Gohir, another British citizen, was extradited to Germany and sentenced to 8 years in early 2016 for his role in a conspiracy worth at least €136 million. Mohsin Usmangani Salya, also a national of Britain, was convicted in Germany in 2016 for fraud worth €125 million. British citizen Faisal Zahoor Ahmad’s dishonest activities, worth more than €40 million, earned him 4-year prison sentence.

Fraudsters originate in all countries, including Britain. Indeed, when it comes to EU nations suffering from British-led fraud, it can be said that the EU’s free movement of goods, capital, services, and labour has facilitated such activity. Would it be reasonable, then, to shut the doors to the free movement of all people from Britain to the European Union after Brexit? Would fraud perpetrated by some be enough to justify barring all other British nationals from travelling visa-free to EU member states?

Most would argue no, and yet this logic is what is currently being applied by MEPs Ana Gomes and Marietje Schaake in a letter to several EU officials, including Donald Tusk, President of the European Council, and Jean-Claude Juncker, President of the European Commission, requesting not that post-Brexit Britain be deprived of its visa-free travel rights to the European Union, but that tiny, Caribbean island-nation St Kitts and Nevis suffer this fate. Indeed, the reasoning applied by the two MEPs is even less sound. They cite the case of Andrei Pavlov, a Russian national accused of financial crimes. Andrei Pavlov does not hold citizenship of St Kitts and Nevis, nor has he ever done so. There is some suggestion that he may have enquired whether citizenship of St Kitts and Nevis was a viable option for himself or his family through the nation’s Citizenship by Investment Programme, but there is no indication that he ever even attempted to apply.

Had he done so, he would have been rejected. St Kitts and Nevis runs a Programme known for the strength of its multi-tiered due diligence. Background checks on applicants extend to their family members, their education, and their finances. Their current and past business activities are scrutinised, as are any political, criminal, or suspicious connection they may have. International, independent due diligence firms are hired to assess each applicant, and criminal and sanctions lists are consulted, including through bodies such as Interpol and, more locally, the Caribbean Community (CARICOM) Implementation Agency for Crime and Security (IMPACS) and its Barbados-based sub-agency, the Joint Regional Communications Centre (JRCC).

What, therefore, one may reasonably ask, is motivating MEPs Ana Gomes and Marietje Schaake to target St Kitts and Nevis? Although they point to security concerns for the European Union, the link between someone who enquired about (but never applied for or received) citizenship, and St Kitts and Nevis itself, is negligible. In fact, security seems to have little to do with their decision to point fingers at the island-state. If security were a concern, wouldn’t Britain be a priority? Would Brexit not be the perfect opportunity to argue for a rescission of visa-free travel rights? Unfortunately, it seems that targeting small island developing nations – even when such targeting is unfair – is an easier option.

It would be interesting to hear MEPs Ana Gomes and Marietje Schaake’s views on whether jumping on the foreign-phobia bandwagon is worth the severe and undue harm that countries such as St Kitts and Nevis would suffer if their calls for barring visa-free travel and ending citizenship programmes were heeded.