Antigua and Barbuda: Snow Washing Conduit

For decades shell companies and bank accounts in poorly regulated jurisdictions offered sufficiently strong solutions for the majority of international money launderers and tax evaders.

However, a relatively new weapon of choice has emerged – the second passport issued by countries such as Malta, Cyprus and several Caribbean states, including Antigua & Barbuda St Lucia and Grenada.

In fact, Malta and former British colonies in the Caribbean like Antigua & Barbuda have rapidly become the hot favourites because of their Commonwealth links worldwide, which permit visa-free travel to more than 168 and 134 countries respectively, including the Schengen region of Europe.

This aspect of indiscriminately provided dual citizenship added to the recent trend of "snow washing" has sent alarm bells ringing around the world.

Few, outside the opaque world of the tax avoidance industry, law enforcement and regulators, will be aware of the rapid growth of so-called "snow washing," which exploits company structure weaknesses in the systems of "white listed" countries like Canada and Scotland.

There is continued growing concern in Europe and the United States over the use of Citizen by Investment Programmes, especially those without any residency requirement. These are being used to defeat the privilege of visa-free travel agreements between specific nation states, which have genuine arrangements, by other countries that have subordinate agreements with the same individual country. 

For example, as a former British colony and a member of the Commonwealth, Antigua & Barbuda has arrangements for its citizens to travel freely to the UK.

As the UK still remains a member of the EU, onward travel to any EU member country is permitted.

Most of the Citizen by Investment Programmes clearly state that visa-free travel is the main key benefit.

Malta has issued over 700 passports to non-EU nationals in exchange for at least €200 million since its CIP started in 2014.

Antigua and Barbuda has almost tripled this number to 1923 passports sold during the same period.

Ana Gomes, who sits on the Justice and Home Affairs Committee said, "Such schemes put at risk the integrity of the Schengen system and should be looked at closer." She has demanded an investigation by the EU Commission into all member state investor schemes, not just Malta's.

Meanwhile, Frank Engel, a centre-right MEP, representing Luxembourg, referring to CIPs remarked, "These are the practices of a banana republic."

Another politician, Latvian MEP Robert Zīle, stated that "Citizenship is something that has to be earned, not simply handed out to people with deep pockets. He further expressed concern that Malta may also be helping to defy the sanctions imposed on Russia by Europe."

Maltese officials defended the Programme claiming that applicants were thoroughly scrutinised.

"The people going through the program have to go through a very strong and thorough due diligence process," Kurt Farrugia, the Prime Minister of Malta's spokesman, noting that 25 percent of applicants are rejected, said "We've always looked to get the quality persons. Applicants must have no criminal record as well as undergo checks against records at the International Criminal Court and Interpol."

Gaston Browne, Prime Minister of Antigua and Barbuda, offers a similar defence of his country's  passport programme, fiercely rebuffing the latest US State Department INCSR report released in March 2017, which describes Antigua's Citizenship by Investment Programme as "among the most lax in the world."

In a European Parliament press release dated 16 January 2014 about a recent resolution on citizenship rights, which was passed by 560 votes to 22, with 44 abstentions. "These are invaluable and cannot have a price tag attached to them. Outright sale of EU citizenship undermines the mutual trust upon which the Union is built.

Parliament also stresses that the rights conferred by EU citizenship, such as the right to move and reside freely within the EU, should not be treated as a "tradable commodity". EU citizenship implies having a stake in the EU and depends on a person's ties with the EU and its member states or on personal ties with EU citizens.

Furthermore, citizenship-for-investment schemes "only allow the richest third-country nationals to obtain EU citizenship, without any other criteria being considered," which implies discrimination."

Meanwhile, approved representatives of spurious citizenship programmes have sprung up in many legitimate countries, many of which do not fall with the remit of local financial conduct regulators.

The Mossack Fonseca law firm behind the Panama Papers scandal has exposed many jurisdictions, persons and companies. 

Many observers were surprised that Canada has emerged a tax haven and money laundering centre.

"Snow washing" has been created by the widespread international tax avoidance industry, using Canada's "white listed" tax destination reputation and sound economy to make suspect transactions appear genuine.

The Canadian Authorities, by their tax agreements with 115 countries, have increased the opportunities for criminals and tax avoiders to transfer funds through its financial system.

Gaps filled by prudent jurisdictions, such as the use of foreign-controlled shell companies, whereby owners remain anonymous because of the use of nominees, have not been closed.

The issuance of new bearer shares has recently been banned but this does not apply to those already issued, giving them a premium value.

Canadian limited partnerships are the corporate vehicle of choice.  This is because there are no filing requirements for non-residents.

Meanwhile, Scotland has also emerged as a hot bed of tax evasion and money laundering because it has a similar limited liability partnership structures to Canada and, like its maple tree cousin, it enjoys the façade of being a white listed jurisdiction.

Growth of this "industry" has trebled since 2011 and shell companies are being marketed around the European Union as Scottish zero tax offshore companies. 

Indeed, whilst the architects of the CIP Schemes, Henley  & Partners claim the benefits of dual citizenship are primarily for the purpose of releasing holders from time-consuming visa applications, free movement and second homes, the better informed remain convinced that the underlying purpose is a fresh, separate identity linked directly to another country, different from the bearer's normal residency.

And so, facilitated by a flaky Maltese or Antigua & Barbuda second passport, masked behind the veil of a Scottish or Canadian limited or limited liability partnership, bank accounts in Cyprus and Latvia can flourish with funds gained from tax evasion, money laundering and other crimes with the bearer safely detached from the original source and the reach of local tax authorities and law enforcement agencies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.