Turkey’s Due Diligence Attracts Concern

Unveiling its Citizenship by Investment (CBI) Programme in only 2017, Turkey has since established itself as an extremely popular destination for second citizenship. After dramatically reducing its minimum investment threshold by 75 percent in 2018, interest in Turkey’s Programme has skyrocketed. In fact, data revealed by the Turkish Interior Ministry shows that a mammoth 4,000 main applicants received citizenship through the Programme in the three months between March and May 2020.

Despite the remarkable spike in the uptake of citizenship under Turkey’s Programme, the sheer number of citizenships awarded becomes problematic when one considers Turkey’s lax approach to vetting its prospective citizens.

Due diligence is widely cited as the crux of the CBI industry and it is arguably the most important part of the CBI process. CBI jurisdictions have a vested interest in protecting their programmes from harm by ensuring that only applicants of the highest calibre are accepted. In the Caribbean, a multi-tiered approach to due diligence is taken, including through initial background checks by agents, internal vetting by highly trained Citizenship by Investment Units, as well as external due diligence by international due diligence firms and regional and international law enforcement agencies.

External due diligence providers, such as those used by Caribbean CBI nations, are specialists when it comes to performing both online and on-the-ground checks to establish an applicant’s identity, family and business ties, and analyse criminal activity, source of funds, and political exposure. Having no vested interest in a positive application outcome, they provide a vital third-party perspective.

Turkey, however, applies a due diligence model that stands in stark contrast with the Caribbean. Applicant’s to Turkey’s CBI Programme are subject only to internal due diligence completed by the Interior Ministry, headed by Suleyman Soylu, in collaboration with Turkish police and state intelligence. By choosing not to outsource due diligence to external firms, Turkey is forgoing a valuable layer of protection and leaving itself open to illicit actors who could potentially pose national security concerns both to Turkey and its international partners.

Established across jurisdictions such as the European Union, the United Kingdom, and the United States, the external due diligence firms used by CBI industry frontrunners are respected globally. As such, CBI countries that mandate the performance of external due diligence maintain strong relationships with international partners. In the Caribbean, this is reflected by the growing number of visa-free and visa-on-arrival destinations to which citizens of Caribbean nations can travel.

As it stands, Turkey has visa waiver agreements with 111 countries and territories and a long history of attempting to obtain visa-free access to the Schengen Area. Applying a system of due diligence with fewer safeguards than Caribbean and European CBI countries only further impedes Turkey’s chances of visa liberalisation with the European Union. If Turkey wishes to increase its visa waiver offerings for citizens, it would therefore do well to invest in greater due diligence.

Despite having garnered investor interest, as a relatively new market entrant, Turkey must endeavour to develop and refine its CBI Programme to hold its ground in the industry. In order to protect both the Programme and the people of Turkey, a complete upheaval is needed where due diligence is concerned. Mandating the use of external due diligence firms and investing in the stringent screening of applicants and their source of funds would be a major step in the right direction for Turkey’s reputation.