BREXIT fuelling British demand for alternative citizenship?

Alicia Nicholls

Nearly two weeks after the British people by a narrow margin voted in favour of the United Kingdom (UK) leaving the 28-member European Union (EU), it seems that the historic BREXIT vote may be having yet another impact.  Although the UK has not yet notified its intention to leave the EU under Article 50 of the Treaty of Lisbon, various news reports have reported an increase in enquiries and applications by Britons for alternative EU citizenship.

Russian media house RT reports “an explosion” of Belgian citizenship requests from British expatriates living in that European country. Bear in mind that Brussels, as one of the “three capitals of the EU”, is home to a large expatriate community, including bureaucrats and consultants working in EU organs and EU-related organisations. According to Sveriges Radio (Radio Sweden), in the immediate days following BREXIT, over 100 Britons applied for Swedish citizenship compared to 440 applications last year.

There is a good reason why some Britons are seeking to ensure that they keep an EU passport neatly tucked away for a rainy day. Article 20(1) of the Treaty on the Functioning of the European Union (TFEU) confers EU citizenship on every citizen of an EU country.  EU citizenship is additional to and does not replace citizenship of the member state. Currently, British nationals, as EU nationals, have the same rights to “move and reside freely within the territory of the Member States” per Article 20(2)(a) of the TFEU as the nationals of any other EU state.

There are possible economic reasons as well. The Office for National Statistics reports that in June 2016, the UK’s unemployment rate was just 5% and the number of unemployed fell during the first few months of the year. Despite this, unemployment could rise should the uncertainty from BREXIT lead to a slowdown in the UK’s growth and an exodus of businesses from the UK as some predict. An EU passport would give those Britons the right to look for work in the remaining EU countries should this occur.

While a contentious issue and believed to be one of the driving factors which influenced the “leave” vote, freedom of movement within the EU single market has benefited many young Britons who currently work and live in other EU member states, as well as British investors who have established businesses in other EU countries. For the reported 1.3 million UK nationals who currently live and work freely in other EU countries, this may change when the UK eventually leaves the EU should freedom of movement concessions not be part of the negotiated agreement. German Vice-Chancellor Sigmar Gabriel has been quoted directly in this article as suggesting that young Britons who live in Germany, France and Italy should be offered EU citizenship.

Dual Nationality

According to this report in the Irish Newspaper, The Journal, there has been an 80% increase in applications for Irish birth certificates since the referendum, as well as an increase in enquiries and applications for Irish passports at UK post offices. Under Irish law, a person with at least one parent who was an Irish citizen at the time of the person’s birth is entitled to Irish citizenship by descent. Those Britons who qualify for dual citizenship of another EU country, whether due to descent or marriage, are more likely to file applications for citizenship now that their rights to work and live in remaining EU countries are uncertain.

Citizenship by Investment

Current drivers of demand for citizenship under CBI programmes include the desire of high net worth individuals, particularly in emerging economies, for passports with greater mobility or to flee instability in their home countries, as well as nationality-based taxation and the reporting requirements the Foreign Account Tax Compliance Act (FATCA) in the case of Americans. However, it seems that there may be greater demand for EU citizenship by investment programmes like Malta’s and Cyprus’ in the wake of BREXIT. Golden Visas notes that “[their] website has seen a surge in enquiries of over 40%”. This is not unexpected as any person who is willing and able to make a qualifying investment (plus meeting the residency requirement) in one of these programmes is able to acquire an EU passport/nationality without much fuss.

Strength of UK passport

BREXIT may not only be fuelling demand by Britons for alternative EU citizenship but may impact on the strength of the UK passport. The president of one of the top global firms assisting clients in obtaining alternative citizenship has posited in this CNN Money article that BREXIT may reduce the power of the British passport which currently ranks among the top most powerful passports in the world.

As this very useful BBC article explains, there are five main models which could be the basis for the negotiated agreement between the EU and the UK. Only two of which I will briefly discuss as these involve freedom of movement. Like non-EU members Norway, Liechtenstein and Iceland, the UK could become a member of the European Free Trade Area (EFTA) and still be a part of the EU’s internal market via the European Economic Area (EEA) which provides for free movement of goods, services, people and capital. Alternatively, it could follow the model of Switzerland, also a member of the EFTA, but is not a part of the EEA. Its access to the EU single market is framed by several bilateral agreements. However, it is unclear which or whether any of these models will frame future EU-UK relations.

In a time of uncertainty like this where it is unknown what rights UK nationals will have in the EU once the UK and EU have negotiated the UK’s withdrawal, it seems that applying for second EU citizenship, whether through descent, naturalisation or by investment, is a source of comfort or an insurance policy for Britons should the worst happen .Nonetheless, for those many Britons who are currently living and earning a living in other EU countries, and do not qualify for alternative citizenship under any of these avenues, BREXIT brings much uncertainty and angst.

It is hoped that the negotiated outcome will permit British nationals to still enjoy some of the same rights to work and live in EU countries as they currently do. It should be noted though that the remaining 27 EU countries are unlikely not to demand reciprocity on the part of the UK in regards to any such freedom of movement concessions, which is quite ironic given that immigration concerns were part of the reason many Britons voted to leave the EU in the first place!

Turning to the Caribbean, it will be interesting to see what impact, if any, this development may have on the citizenship by investment programmes being offered by some Caribbean countries.  Will BREXIT lead to greater demand for EU based programmes like Malta’s and Cyprus at the expense of Caribbean programmes which (due to visa waivers) only give access to the Schengen area but not the right to live and work in the EU? Very little data is available on these programmes and their client bases but given that it would appear from reports that wealthy Chinese, Russians and Middle Easterners are among the main investors in Caribbean CBI programmes, it is unlikely that they will receive any major fallout from BREXIT. However, only time will tell. Suffice it to say, these are interesting times.

 Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s