分类: ryan devaux

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Renegotiation of Marketing Agent Agreement Took Toll on Saint Lucia CIU Finances in FY2019-20

2019-20 was the fiscal year in which Saint Lucia renegotiated its Marketing Agent Agreements to remove geographic exclusivity. That effort, writes Ryan Devaux, Chairman of the Saint Lucia Citizenship by Investment Board, though both costly and time-consuming, would ultimately stand the program in better stead going forward.

The year, wrote the Chairman in his annual report, had been one denoted by “challenge, hard work, and, ultimately, success for CIP Saint Lucia. […] we were successful in renegotiating both of our Marketing Agent Agreements. This took a significant amount of time and effort and, as an end result, we successfully repositioned our marketing efforts to be open and inclusive to all, including the two firms with whom we have worked historically. Geographic exclusivities were removed and we restructured our commission framework to be equally applicable to all […]”

The reshuffle, however, came at a cost to CIU finances and program performance, the Chairman pointed out.

“During that period of negotiation, the marketing agents’ efforts towards marketing the program and driving applications were suspended, which impacted on achieving the budgeted 360 applications.”

In the process of arriving at an amended marketing agreement, explained Devaux, the CIU had incurred extra-budgetary settlement and commission payments to the marketing agents as well as legal fees associated with the negotiation, which had contributed to a deficit for the CIU in 2019-20.

Though application numbers increased in 2019-20 (from 152 to 193), approval volume fell from 210 to 143. NEF contributions from approved applications amounted to EC$36m during the period, down from EC$62m last year. The Saint Lucia CIP has raised some EC$131 million (nearly US$50m) in National Economic Fund contributions since 2015.

20% of those contribution amounts, however, are retained by the CIU to pay for items like marketing, promotion, and commissions to agents, which means the net revenue for the government’s National Economic Fund amounted to EC$29m in 2019-20.

The Saint Lucia CIU segments its expenses into Program Costs (those directly relating to processing, such as due diligence expenditure and commissions to agents) and Operating Expenses (expenses related to the running of a CIU, such as payroll, office supplies, rent, and so on). Though Program Expenses were down significantly (which, as Chairman Ryan Devaux explained, is directly related to lower program revenues) and Operating Expenses were materially unchanged from the preceding year, the fall in investment and contribution revenue saw the CIU record an annual deficit of EC$ 662,964, down from a surplus of some EC$2.7m last year.

Though finances at the CIU may have suffered short-term negative impacts, now that renegotiations have been completed and applications are reaching record-levels for the 2020-21 fiscal year, subsequent financial statements are likely to paint a more positive picture of CIU finances.

The National Economic Fund, irrespective of the performance of the CIU’s internal finances, continues to grow in size.

More Intel & Data

Though costs associated with renegotiations drove a deficit internally in the CIU, Saint Lucia’s CIP has so far raised near US$50m in contributions.

Laboring under a pandemic, Greek bureaucrats might have been excused were it not for the starkly contrasting performance of Portuguese peers.

“For some, it is dissatisfaction with Trump; for others, it’s apprehensions about Biden,” says Lisbon-based lawyer Patricia Valadas Coriel.

 

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Saint Lucia CIP Approvals Drop by 32% in FY2019-20

The number of approved applications for Saint Lucia’s Citizenship by Investment Programme fell to 143 during the 2019-20 fiscal year (which ended on March 31st, 2020), a reduction of about 32% compared to the preceding fiscal year, in which 210 approvals were granted.

The drop, according to Ryan Devaux, Chairman of the country’s Citizenship by Investment Board, was owed to a now-resolved impasse with the program’s international promoters. “During the period of negotiation, the marketing agents’ efforts towards marketing the program and driving applications was suspended,” Devaux wrote in the annual program report seen by the Saint Lucia Star. (The report, lamentably, is only viewable by physical visits to the Parliament building in Castries.

In the report, Devaux characterized the 2019-20 fiscal year as one of “challenge, hard work and ultimately success.”

The 143 approved applications had resulted in the bestowal of 188 new citizens, down from 288 in 2018-19 fiscal year. Of those, 70 were of Chinese origin, 23 were Russian, 15 Nigerian, and 10 Turkish. Since the program’s inception, Saint Lucia’s CIP has naturalized more than 800 individuals and raised some EC$131 million (about US$49m).

Nestor Alfred, the helmsman of the Saint Lucia Citizenship by Investment Unit, expressed satisfaction with his unit’s ability to adapt to the unexpected circumstances that arose in 2020 and carry on processing relatively uninterruptedly, even as staff members worked remotely.

“[…] This Unit has clearly demonstrated its ability to continue doing this despite any pandemic or natural disaster,” said Alfred, according to the Star.

The true impact of the pandemic on Saint Lucia’s CIP will not be clear until figures covering the FY2020-21 period (April 1st 2020 to March 31st, 2021) are published next year.

More From the Caribbean

The drop, according to Ryan Devaux, Chairman of the CBI Board, was owed to a now-resolved impasse with the program’s international promoters.

A transition period that will see the exclusion of metropolitan and coastal areas from the program will begin on July 1st next year.

Once more confirming the tried-and-true IMI adage that says “nothing is so unlimited as a limited time offer on Caribbean CBI.”

 

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