All foreign investors must undergo comprehensive screening

BASSETERRE, St. Kitts – Following Antigua’s recent Allen Stanford scandal, Minister of Finance and International Trade Hon. Dr. Timothy Harris has maintained that it is critical to continue due diligence checks on investors to reduce the exposure of the economy to “unscrupulous” investors. 

In an exclusive interview with SKNVibes, Dr. Harris explained that as it relates it foreign investments, the government has a policy that due diligence checks must be carried out on the principal investors. He added that such screening is carried out through the financial services arm of the government and involves requesting the services of regional and international bodies.

“Through the due diligence searches, we would have a better understanding of the investor’s background and searches would assist in discovering cases of unfavourable conduct, criminal record and misdemeanour of the investor. The check should give the government reasonable assurance that the individual is a clean investor. This system has worked well in the past and much action has been taken based on results of due diligence.”

Harris said there is an emerging view that doing a comprehensive and complete due diligence check adds to time and cost. He added however, that there needs to be a balance as lengthy and formidable screening processes may discourage clean foreign investors.

“At the same time, it is hoped that it should be very easy for people to form businesses and that government should look at alternatives to encourage swift screening. Yet, we must be cautious in our checks as when they [scandalous investors] are uncovered it brings a shock to the society and the protection of the jurisdiction reputation in the international market place would be at risk. We must therefore make a balance of bureaucracy and the necessary system to encourage investors.”

Minister Harris said although due diligence checks can be “a bit onerous and expensive”, it is an imperative as one search of an investor can save the economy. He stressed that the screening process is a critical element particularly for small and vulnerable countries as many investors attempt to exploit the region.

Dr. Harris noted that his government intends to continue to rely on due diligence as it allows it to assess the credibility of investors now that “we have more of such personalities coming in to our markets to invest”.

“There is no guarantee that this system would recognize all cases, in fact, investors may change their motives after diligence checks have been carried out. There is no perfect system, but it is an aid in an environment where issues in the financial system relating to exploitation are pronounce. 

While it is true that we not as sophisticated [as larger economies] and we are not fully able to determine the motivations of investors, this is our precaution and it may put us on an alert, providing corroborative data in terms of the investors credibility.”