The Bahamas is one of 21 countries said to be  participating in “Golden Passport” schemes where foreigners sought citizenship in an effort to evade taxes in their home country, the London-based newspaper The Guardian yesterday reported. This report was  denied by the government of the Bahamas.

The daily suggested that these golden passport schemes “threaten international efforts to combat tax evasion”, and that this “fast-expanding” industry earned $3 billion.

The report, issued by the Organization for Economic Cooperation and Development (OECD), said, “while residence and citizenship by investment (CBI/RBI) schemes allow individuals to obtain citizenship or residence rights through local investments or against a flat fee for perfectly legitimate reasons, they can also be potentially misused to hide their assets offshore by escaping reporting under the OECD/G20 Common Reporting Standard (CRS).

“In particular, Identity Cards and other documentation obtained through CBI/RBI schemes can potentially be misused abuse to misrepresent an individual’s jurisdiction(s) of tax residence and to endanger the proper operation of the CRS due diligence procedures.”, it added.

The article said that nations on this list offer foreigners citizenship or residency “in exchange for donations to a sovereign trust fund, or investments in property or government bonds”.

It also reported that countries like Antigua and Barbuda, The Bahamas, Dominica, Grenada, St Lucia, and St Kitts and Nevis, sold “16,000 passports since relaunching its programme in 2006.”

The OECD also believes that this ease in obtaining another nationality “undermines information sharing”, and explained that that these countries lure potential investors with low income tax rates without requiring these individuals to spend a significant amount of time in that country.

In an effort to combat this notion, the organization also published literature educating parties that can potentially become affected.