The Price of a Passport

In October 2023, an investigation by the Organized Crime and Corruption Reporting Network revealed that a former Afghan intelligence chief accused of human rights violations, Saddam Hussein’s top nuclear scientist, and a high-ranking colonel under the Libyan despot Muammar al-Qaddafi all had something curious in common: they were compatriots of the Commonwealth of Dominica. These men had not fallen in love with the Caribbean island on a beach vacation or expatriated there for a simpler life. They are what are known as “economic citizens”: people who have legally purchased a second nationality from a place with which they have few, if any, ties.

The industry of citizenship by investment—the legal, state-sanctioned sale of passports to non-nationals—is booming. Today, more than a dozen countries have entered the business of naturalizing wealthy foreigners for no other reason than to fill state coffers. These programs, which can boost a country’s GDP, have encouraged tourism, reduced national debts, helped rebuild infrastructure after natural disasters, and kept schools and pension plans afloat. Particularly for very small countries, the sale of citizenship is an economic tool, a branding exercise, a jobs program, and a foreign policy crutch rolled into one. For their wealthy clients, it is a way to navigate the world with greater ease: to bank and transact under a different flag, to travel with fewer restrictions, and, perhaps more sympathetically, to define themselves by something other than the accident of their birth in a country with a tarnished reputation or one whose citizens face many restrictions in traveling abroad.

But selling citizenship represents, to paraphrase the Harvard ethicist Michael Sandel, the degradation of a democratic ideal—the cheapening of an invaluable public good. It also sounds an awful lot like the subplot of a Graham Greene novel. Jho Low, the Malaysian mastermind behind an enormous embezzlement scandal related to Malaysia’s sovereign wealth fund, was found in 2021 to have acquired the citizenship of both Cyprus and St. Kitts and Nevis, presumably with the hope that it would help him dodge the law. He had spent millions of dollars on fees and investments into special programs that awarded him these passports. Comoros, which sold close to 50,000 passports over the course of a decade in a convoluted scheme to document large numbers of stateless Emiratis, in 2022 sentenced its former president to life in prison for his role in the affair, charging him with “high treason.” The recent report about Dominica from the Organized Crime and Corruption Reporting Network identifies two Russian billionaires now on the U.S. sanctions list and a Jordanian father-son duo who would end up being charged with embezzling tens of millions of dollars as Dominican investor-citizens.

Citizenship may be a deeply meaningful notion to many people, but it is also a commodity that can be bought and sold. And according to The Golden Passport, a new book by the sociologist Kristin Surak, its commoditization is only set to grow. The market for passports has, in recent years, become almost institutional thanks to years of lobbying, standardization, and professionalization.

Nationalists may point to the emergence of this industry as yet more proof of the nefariousness of so-called globalist elites bent on skipping from one privileged island of wealth to another—in the process eroding the very ideas of citizenship and nationhood. And yet the growing popularity of citizenship-by-investment schemes (sometimes among public officials themselves) is a reflection not of collapsing borders but of hardening ones. The wealthy buy passports to escape the arbitrariness of their birth and navigate a world in which barriers to movement are getting ever higher. The industry that serves them capitalizes on these very inequalities: the massive economic rifts between the rich and the poor, and the politics that make an Afghan passport, for instance, so much less useful than a Singaporean one.

NATIONALITY FOR SALE

People have probably bought passports for as long as there have been passports, which have existed in some form since the Mongol empire but were not used to document ordinary people en masse until the twentieth century. Informal, temporary, or fly-by-night passport-selling schemes have come and gone over the years, often in step with war, unrest, and political uncertainty. In the 1980s, when the British decided to eventually relinquish Hong Kong to China, the sale of “exit” passports from island countries in the Pacific and the Caribbean boomed among wealthy Hong Kongers who feared they would not be able to escape life under communist rule. So, too, did the unofficial sale of documents at foreign embassies to stateless people in the Gulf in the 1990s.

These citizenships were not real in the sense that they represented a meaningful link to a place, or fellow feeling with its people. Their sale also tended to involve a degree of unlawfulness: more than one official was arrested for bending (or simply making up) the rules. But for people desperate for mobility, recognition, and peace of mind, such documents did the trick, at least for a while.

According to Surak, the market for citizenship began to formalize in 2006, when a Swiss businessman named Christian Kalin advised the island country of St. Kitts and Nevis to make the most of an old law it had on the books offering the islands’ citizenship in exchange for an “economic contribution.” (The cost has varied; today, it is $250,000 or a $400,000 investment in real estate.) Kalin, who had worked with ultrarich clients in Switzerland, believed this demographic could be sold on the appeal of second passports as a Plan B—an alternate citizenship to ease travel, open bank accounts and companies, and find shelter in case of political instability at home.

Citizenship is now a commodity that can be bought and sold.

In exchange for the right to market the program, Surak notes, Kalin’s firm spruced up the application process. Kalin and his colleagues traveled the world to bring in clients, in the process lending the business a veneer of professionalism. St. Kitts and Nevis was, incidentally, in the market for a savior: its economy was in bad shape after its sugar industry went into decline in the 1980s. The quarter million dollars that the consultant proposed the government charge each applicant was nothing to sniff at, and it certainly couldn’t hurt to have more wealthy Kittitians and Nevisians who could invest in the country and tell their rich friends about the islands.

It was a gamble, but the payoff was ultimately huge. Around 40 percent of St. Kitts and Nevis’s GDP now comes from investor-citizens buying real estate in the country and making cash donations to a state development fund, even though they rarely set foot there at all. Before long, St. Kitts’s Caribbean neighbors got on the bandwagon: Antigua and Barbuda, Dominica, and Grenada all either adopted or revitalized regulations allowing for much the same thing. Vanuatu, in the Pacific, launched a program in 2017, appealing mainly to applicants from China and the Middle East. By most measures, these programs have been lucrative for the governments that run them. St. Kitts and Nevis has been able to drastically reduce its sovereign debt, winning the endorsement of the International Monetary Fund for ingeniously taming the country’s budget. One can imagine a future in which citizenship by investment has a place alongside the development of special economic zones, privatization, trade liberalization, and other structural adjustments long prescribed by international lenders.

Europe, too, has been home to several citizenship-by-investment schemes. In 2014, Malta followed the example of Cyprus, which offered foreigners golden passports until a corruption scandal brought the program down in 2020. Malta—which also sought advice from Kalin’s firm—asked prospective clients for donations and investments totaling $1.2 million. But a Cypriot or Maltese passport did not just grant its buyer access to those island countries. By obtaining citizenship from Cyprus or Malta, investors gained the right to live and work in the entire European Union.

Since the EU imagines European citizenship to be derivative of national citizenship and, therefore, the prerogative of member states, individual countries are left to determine their own processes for naturalizing citizens. This means there is little that Brussels can do to stop the likes of Cyprus and Malta from reaping the rewards of this trade: a boon for the smaller states that need the money and a nuisance for lawmakers who have a somewhat loftier view of what it means to be European.

BIG PASSPORT

As more countries adopted such policies, a $4 billion assembly line of consultants, lawyers, bankers, wealth planners, real estate developers, marketers, background checkers, even specialized paperwork filers stepped in to serve a growing number of clients, countries, and brokers. The industry, conscious of its unseemly connotations and the objections of nationalists who see citizenship as something priceless, also began spending a lot on polishing its image: the two main competing firms created indices of the best and worst passports, formed trade groups to regulate their own practices, and took out ads in the business press and airline magazines to attract clients. They were not peddling passports, their literature insisted; they were making global citizens.

Surak begins her book at an absurd gala in Podgorica, the capital of Montenegro, in 2017. The evening was organized by a firm that was helping Montenegro market its passport to the global elite. (It has since ended the program.) The organizers spared no expense on the lavish event, which masqueraded as a ceremony honoring the recipient of that year’s Global Citizen Award. I attended many such events while researching my 2015 book on citizenship by investment, and they all follow the same pattern: speakers make the requisite displays of solidarity with refugees, express passing concern for climate change, and reiterate the vapid insistence that we are all bound by our common humanity. (My favorite example of this was a chorus of children singing “We Are the World” at a 2014 event in Toronto.)

Since my book came out, however, it appears that the passport brokers have leveled up. The speakers Surak saw in Montenegro would feature on the A-list of any globalist gala. Former UN Secretary-General Kofi Annan launched the evening via video. Cherie Blair, a British lawyer and the wife of former British Prime Minister Tony Blair, talked about women’s rights. Jeannette Kagame, the Rwandan first lady, praised entrepreneurial mothers. Wesley Clark, the American general who ran NATO’s war in Kosovo in the late 1990s, made an appearance on stage. The actor Robert de Niro spent his speech railing against then U.S. President Donald Trump and talking about his own work rebuilding Barbuda, where he is an economic citizen. The president of Antigua and Barbuda spoke, too, adding to a chorus of citizenship-by-investment boosters outlining existing or future programs in Armenia, Moldova, and Montenegro. The presence of such illustrious individuals in proximity to the passport industry is revelatory. If there was ever a stigma attached to selling passports, or even a vague perception that it is wrong to buy one, those days are quickly fading.

The sale of passports is also a significant geopolitical development. Small and island states—some of the most threatened by rising sea levels and climate change—are the main protagonists here, and they see citizenship by investment as a way of securing their economic futures, even if it runs against the wishes of international law enforcement and blocs such as the EU. Their defiance is striking: many of these countries are also former colonies, and by commercializing their passports, they are squeezing every last drop of value and utility out of their postcolonial independence.

This all makes Surak’s book required reading for policymakers working with small countries. But it is also a fascinating study of how people—and their capital—seek to move around a world that is at once hugely interconnected and riven by inequities. With fieldwork spanning 14 countries from the United Arab Emirates to Vanuatu and interviews with dozens of clients, practitioners, and government officials, The Golden Passport is a definitive, detailed, and unusually nuanced account of the industry.

The book is full of surprising insights and new information. For instance, the country that naturalizes the most investors today is Turkey, which even at the height of the COVID-19 pandemic was taking in more than 1,000 applicants per month. Turkey also happens to be home to a disproportionate number of refugees, proving, according to Surak, that the imperatives of welcoming rich arrivals and poor arrivals “are not mutually exclusive.”

Surak’s insights about the role of the United States are also novel. It does not sell citizenship outright, but for decades it has offered wealthy foreigners permanent residence through the EB-5 visa, a convoluted investment scheme that raises cash for developments as varied as ski slopes and public WiFi initiatives. This kind of program is known in the industry as residence by investment, and it is an indirect way to become American: after holding a green card for five years, investors can apply for U.S. citizenship.

Buying a new nationality helps the wealthy overcome the accident of their birth.

Surak notes that the United States tacitly supports citizenship by investment by serving as an “international partner” to several Caribbean programs—a vague role that essentially gives it the power to blacklist applicants it deems a security risk. (On a podcast, Surak compared its attitude to a parent watching a teenager smoking: “You think if you’re going to crack down on it, you might actually drive it into something harder, but you just kind of want to monitor it to make sure it doesn’t go too far off tracks.”)

In this way, citizenship-by-investment programs in the Caribbean give the United States more control over the activities of its island neighbors, not less. Surak goes so far as to argue that the industry would not be what it is today without U.S. rules, restrictions, and stipulations. Americans also increasingly number among the industry’s clients. The COVID-19 pandemic pushed more Westerners to explore second passports, she writes, because they were so unused to being told where they could and could not go.

Although wealthy people have many reasons to want another passport, Surak finds that such citizenship purchasers are not primarily motivated by the desire to avoid taxes. The industry helps the wealthy overcome the accident of their birth, which can come with visa restrictions, economic sanctions, and the more modest discomfort of being treated like a second-class millionaire. The rich, she notes, are less interested in breaking the law than in making sure the law is in their corner. Unsurprisingly, she finds that the ability to cross borders tops the list of reasons why people obtain a second passport. Whether you are a paranoid tech founder building a bunker in New Zealand or an Iranian businessperson tired of being treated like a terrorist at every turn, a different passport can offer an escape from the inconveniences of a troublesome citizenship.

In a world of tightening borders, buying the passport of a particular country can be a roundabout way to a more distant destination. Chinese and Indian nationals seeking to live and work in the United States may have to wait decades for a visa, but a passport from the Caribbean nation of Grenada can offer a shortcut. In September, an industry newsletter reported that 90 percent of applicants in 2023 to Grenada’s citizenship-by-investment scheme were Russian nationals, who were likely reacting to the isolation of their birth country and the growing repression there. A foreign passport will not magically remove an individual from a U.S. sanctions list. But being a citizen of Grenada can pave a path out from under Putinism for anyone who can afford it.

RED CARPETS AND HIGH WALLS

Surak is sensitive to both the glaring global inequality that makes this industry possible and the contradictions presented by its opponents. Nationalists of all political stripes contend that true belonging cannot carry a price tag; it is a status to be revered, not hawked. Internationalists and progressives object to the unfairness of such programs, which offer citizenship and access to the already privileged, not those with the greatest need. The European Parliament, in particular, has come out strongly against the practice. (Surak speculates that this is a result of lobbying from a Maltese nationalist party that opposed Malta’s Labour government, which was behind the scheme. Indeed, the EU has directed most of its ire at Malta, not Austria, Cyprus, and Montenegro, all of which have had similar offerings.)

At present, the European politicians have issued nonbinding notices, statements, and resolutions in an effort to stop the practice, but Surak believes that Brussels will eventually try to extend its jurisdiction over naturalization matters. In 2022, the European Parliament referred Malta’s “golden passport” scheme to the European Court of Justice, observing that recent reforms—notably, suspending applications from Russian and Belarusian citizens—did not go far enough and that the practice “is not compatible with the principle of sincere cooperation enshrined in Article 4(3) of the Treaty on European Union, and with the concept of Union citizenship.”

Beneath the predictable political posturing, the ethics of passport selling are complex. Of course, it is unjust that Libyan millionaires can waltz into Malta on a red carpet while their impoverished compatriots risk everything to cross the Mediterranean. Nothing illustrates the way borders exist for some and not others than these parallel experiences of immigration.

But these journeys are each a symptom of a much bigger problem. If these individuals enjoyed genuine freedom of movement, were not routinely discriminated against on the basis of where they came from, and were guaranteed a modicum of rights, opportunities, and responsibilities regardless of where they lived, passport arbitrage would have no utility, and people would not have to risk their lives on leaky boats to improve their lot. To oppose citizenship by investment on nationalist grounds is to reinforce the logic that brought it about in the first place: the logic of categorizing people solely by where they come from.

To complain, as the European Parliament has for years, that outsiders should not have access to the bloc without residence requirements, language tests, or other displays of civic engagement is incoherent, Surak argues. After all, Americans with European ancestries routinely apply for citizenship by descent from European countries without facing the same pushback. Armies of expensive lawyers and ancestry researchers help secure citizenship for those who have little tangible connection to the country of their ancestors. To endorse murky ancestry claims over hard cash is not about fairness or civic participation. It is to endorse the blood-and-soil eternality of the nation—whether lawmakers in Brussels will admit it or not.

The system produced by citizenship-by-investment schemes is surely unfair. But any status or privilege assigned at birth is, by its very nature, arbitrary. To focus on the unique unfairness of the sale of passports without reckoning with citizenship’s fundamental inequities is to miss the point. Surak’s contribution is to convey these moral quandaries without losing sight of the world that made them.